The Reserve Bank of India on Tuesday extended the timeline for processing recurring online transactions. The Reserve Bank of India (RBI) published a system for handling e-mandates for recurring online transactions. The platform, which was initially limited to cards and wallets, was expanded in January 2020 to include Unified Payments Interface (UPI) transactions.
The main goal of it was to protect consumers from fraudulent transactions while also improving their convenience. The Reserve Bank had advised stakeholders in December 2020 to migrate to the system by March 31, 2021, based on a request from the Indian Banks' Association (IBA) for an extension of time until March 31, 2021, to enable the banks to complete the migration.
Additional Factor of Authentication (AFA) requirements have made digital payments in India safe and stable.
The system required the use of AFA during registration and the first transaction with relaxation for subsequent transactions up to a cap of 2,000, which has since been increased to 5,000, as well as pre-transaction notification, the ability to cancel the requirement, and other features to improve consumer comfort and safety when using recurring online payments, the RBI said.
It should be noted, however, that despite the extended timeline, the system has not been completely implemented. This non-compliance is taken seriously and will be discussed separately, it added.
Since some stakeholders have been slow to adopt, there is a risk of widespread consumer inconvenience and default. To avoid causing customers any inconvenience, the Reserve Bank has agreed to extend the deadline for stakeholders to move to the system by six months, until September 30, 2021.
Any further delay in ensuring complete adherence to the framework beyond the extended timeline will attract stringent supervisory action.