The Reserve Bank of India (RBI) has recently set a rule governing the way businesses can process recurring payments. Do you want to know more about the topic? Do you need help with recurring payment processing? Look no further. You’re at the right place.
RBI’s Recurring Payments Rule: Recurring Payment Processing
Recurring payments are a transaction model. In this case, merchants get a one-time standing instruction from customers to periodically debit funds from their accounts automatically. The majority of subscription-based businesses in India and worldwide are based on this payment model.
On October 1, 2021, new rules came into force. Now, customers must give their consent for every recurring payment of over Rs 5,000. Besides, they must be subject to two-factor authentication to process payments. Previously, they had to go through a simple auto-debit process.
Payments up to Rs 5,000 require standing instruction re-authentication to make subsequent payments without being subject to the additional factor authentication (AFA).
Given the recent changes and developments in payments, it’s more crucial than ever to work with a true payment expert to enjoy seamless recurring payment processing. Consider working with a payment expert that guarantees an unmatched experience to you by providing the latest technology allowing you to manage Global Payments across a single platform.
RBI’s Recurring Payments for Businesses
According to the RBI, their framework is developed to mitigate payments-related risks and facilitate the payments process for customers. Issuers processing this type of transactions must send a pre-transaction notification to the customer. The notification must be sent at least 24 hours before the actual charge by SMS or email, based on the customer’s preferences.
In September 2021, experts in the field reported noted that e-mandates for recurring online transactions and guidelines associated with the Payment Aggregators and Payment Gateways (PAPG) would create headaches. These would specifically refer both to payment aggregators, gateways, and merchants, small businesses, banks, and others.
RBI’s Recurring Payments: New Rules
RBI has announced new rules for recurring payments. This would mean disruption for businesses. Make sure to work with a true payment specialist to get the best for your eCommerce business needs so to move forward without challenges.
Author Bio: Content crafter Alex Wilmont has been active in the payments industry for over 15 years. He lives simply, gives generously and loves his 2 dogs. His mission is to enhance and innovate the fintech industry for years to come.