Banks To Decline Auto Pay Transactions From April 1
PrintListen to this Article
0:00
0:00
Banks are likely to decline auto payments from April 1 as all recurring transactions using cards and prepaid payment instruments will now require an additional factor of authentication, as per an RBI circular first issued in December 2020.
Transactions above ₹ 5,000 will require an additional one-time password. A notification will be sent to customers five days before an automatic payment is scheduled and the transaction will go ahead only if approved by the user. If banks decline automatic payments, the users will have to make manual transactions to complete their bill payments.
People use recurring mandates on debit/credit cards to pay for bills and subscription services such as OTT streaming, media, utility and postpaid services. Rejection of payment is likely to cause a huge disruption, with estimates suggesting that transactions worth about ₹ 2,000 crore could fail from April 1. UPI transactions will, however, remain unaffected by the new rule.
Third-party payment processors have also declined to share customer information with banks due to contractual agreements and this has further aggravated the problem.
The central bank has refused to extend the deadline, but the matter is expected to be resolved in the coming weeks.
In auto pay transactions, money is automatically transferred on a scheduled date towards payment of recurring bills such as credit cards and utility bills.
Transactions above ₹ 5,000 will require an additional one-time password. A notification will be sent to customers five days before an automatic payment is scheduled and the transaction will go ahead only if approved by the user. If banks decline automatic payments, the users will have to make manual transactions to complete their bill payments.
People use recurring mandates on debit/credit cards to pay for bills and subscription services such as OTT streaming, media, utility and postpaid services. Rejection of payment is likely to cause a huge disruption, with estimates suggesting that transactions worth about ₹ 2,000 crore could fail from April 1. UPI transactions will, however, remain unaffected by the new rule.
Third-party payment processors have also declined to share customer information with banks due to contractual agreements and this has further aggravated the problem.
The central bank has refused to extend the deadline, but the matter is expected to be resolved in the coming weeks.
In auto pay transactions, money is automatically transferred on a scheduled date towards payment of recurring bills such as credit cards and utility bills.
Category : Banking | Comments : 0 | Hits : 1419
The Financial Intelligence Unit-India (FIU-IND), in furtherance of the powers conferred upon the Director FIU-IND under Section 13(2)(d) of the Prevention of Money Laundering Act (PMLA), 2002, has imp...
The government on Monday informed the Lok Sabha that all Scheduled Commercial Banks have written off nearly Rs 10.6 lakh crore in the last 5 years, out of which nearly 50 per cent belong to large indu...
The government has cleared the extension of tenure of managing directors of two public sector lenders -- Bank of Maharashtra (BoM) and Central Bank of India. According to sources, Appointments Co...
Comments