FAQs on how auto-debit facility is going to change from October 1, 2021

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The auto-debit facility on your credit and debit card is going to change starting October 1, 2021. This is because effective October 1, 2021, banks will not approve any standing instruction (e-Mandate for processing of recurring payments) given at merchant website or app on credit and debit cards, unless it is as per RBI compliant process. Moreover, for transactions above a certain limit, you may have to process some of the transactions manually given the security measures introduced by RBI. Here are some of the frequently asked questions relating to changes in auto-debit facility from October 1, 2021:

What is the implication on debit/credit users?

From October 1, 2021, the bank will only approve standing instructions if it has been processed as per the new guidelines for ‘Processing of e-mandates on cards for recurring transactions’ by the service providers. This will have an impact on recurring transactions already done through your debit and credit cards. However, it will not impact transactions done through net banking.

What will get changed?

If the recurring charge amount is less than Rs5000, then the amount is automatically charged without Additional Factor Authorisation (AFA). If the recurring charge amount is more than Rs5000, you need to approve the transaction via AFA and then the amount is charged. Moreover, at the time of registration now validity period and the maximum amount is provided. Bank and merchant will also provide a facility to view, modify,approve, pause, cancel standing instructions.

Will it affect your EMI?

There will be no impact on EMI transactions and one-time non-recurring payments.

What can you do if you want to continue using the subscribed services?

• You will have to check the bank’s website on/after 1st Oct ‘2021 to see the list of service providers and merchants that have enabled the new common RBI compliant platform.

• You will need to register afresh for each service such as Google, Netflix, etc to permit them to charge your card for recurring payments.

• If your service provider doesn’t get enabled for the new common RBI platform on 1st Oct’21 in that case you can use our net banking platform to register your bills for auto payments via BillPay service.

Are the merchants and banks ready?

HDFC website states that “The new conditions prescribed by RBI require a cohesive effort by all stakeholders, including Card Issuing banks, Merchant Acquiring Banks, Card Networks and Merchants. All constituents must complete the development, integration and deployment of a common platform fully compliant with the RBI guidelines. A common industry-wide platform has been developed, and HDFC Bank has completed its internal development and integration. We are now working jointly with merchants to make it live for customers at the earliest.”

Why is there a change in the existing payment mechanism system?

A new regulatory guideline has been put in place for the safety and security measures of card payments. With the rise in online frauds, the regulator has brought these new rules.

Will the customers have to pay charges if the recurring payment transaction gets declined?

The ICICI Bank website states “The bank will not levy any charges. However, in the event of merchant/service providers levy any charges/fees towards the non/delayed payments, bank will not be responsible for the same.”