The Reserve Bank of India has passed a notification dated 21 August 2019 regarding the processing of e-mandate for card payments especially for “card-not-present” (CNP) transactions. The notification has been passed keeping in view the changing payment needs and the requirement to balance the safety and security of card transactions with customer convenience.As per the notification, the...
The Reserve Bank of India has passed a notification dated 21 August 2019 regarding the processing of e-mandate for card payments especially for “card-not-present” (CNP) transactions. The notification has been passed keeping in view the changing payment needs and the requirement to balance the safety and security of card transactions with customer convenience.
As per the notification, the RBI shall authorize processing of e-mandate on cards for recurring transactions (merchant payments) with Additional Factor of Authentication (AFA) during e-mandate registration, modification and revocation, as also for the first transaction, and simple/automatic subsequent successive transactions. The RBI has decided to allow processing of e-mandate on cards for recurring transactions (merchant payments) with AFA during e-mandate registration, modification and revocation, as also for the first transaction, and simple / automatic subsequent successive transactions. The RBI has set up a maximum permissible limit for a transaction to be Rs. 2,000/-.
The directive was issued under Section 10 (2) read with Section 18 of Payment and Settlement Systems Act, 2007 (Act 51 of 2007), and shall come into effect from September 1, 2019.
Applicability
The e-mandate arrangement on debit/credit cards was only for recurring transactions and not for a ‘once-only’ payment.
A one-time registration process with AFA validation has to be undertaken by the Prepaid Payment Instrument Issuers (issuer). An e-mandate on card for recurring transactions shall be registered only after successful AFA validation, in addition to the normal process required by the issuer.
The overall cap fixed by the RBI is currently Rs. 2,000/- per transaction.
Subsequent recurring transactions shall be performed only for those cards which have been successfully registered and for which the first transaction was successfully authenticated and authorised. These subsequent transactions may be performed without AFA.
Dispute resolution and grievance redressal
An appropriate redress system by the issuer has to be put in place to facilitate the cardholder to lodge grievance(s). Card networks shall also put in place dispute resolution mechanism for resolving these disputes with clear Turn Around Time (TAT).
The card networks shall make suitable arrangements to separately identify chargebacks/dispute requests in respect of e-mandate based recurring transactions.