RBI Issues Consolidated Directions on Digital Payments

Reserve Bank of India Introduces Additional Authentication for E-Mandates

The Reserve Bank of India (RBI) has issued consolidated guidelines for e-mandates used in digital payments, effective immediately. The new norms make an additional factor of authentication (AFA) mandatory for processing recurring payments through various channels, including cards, prepaid payment instruments, and the unified payments interface.

Key Provisions

The guidelines apply to all payment system providers and participants handling recurring payments, both domestic and cross-border. To opt for the e-mandate facility, customers must complete a one-time registration process, which includes successful validation of an additional factor of authentication (AFA) beyond standard issuer checks.

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Transaction Limits and Authentication

Recurring transactions exceeding Rs 15,000 will require additional authentication. Payments such as insurance premiums, mutual fund subscriptions, and credit card bills above Rs 1 lakh will also need an extra layer of verification. Furthermore, the first transaction under any e-mandate must be authenticated with an additional factor.

E-Mandate Framework

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The RBI has clarified that customers will not be charged for availing the e-mandate facility for recurring payments. E-mandates can be set for fixed or variable amounts within limits prescribed by the central bank. For variable mandates, issuers must enable customers to define a maximum transaction value. Any changes to an existing mandate will require fresh authentication. The RBI has also emphasized the importance of clearly communicating the flexibility of modifying or canceling e-mandates to customers during registration.

The RBI's move aims to enhance security and trust in digital payments, while ensuring convenience for customers. The new guidelines are expected to benefit both consumers and businesses by reducing the complexity of recurring transactions.