The Reserve Bank of India’s new guidelines may not take effect from today as mandated, the deadline for adherence having been extended till September 30 since the banks and merchants are not ready with the infrastructure, but change is certainly coming with regard to auto-payment rules for mobile, utility and other bills. The e-mandate requires additional factor authentication for recurring transactions. Banks are supposed to inform customers in advance about auto-debit payments that use debit cards, credit cards, UPI and other prepaid payment instruments below Rs 5,000. The users will have to give the go-ahead at least once for every auto-debit payment. For recurring payments above Rs 5,000, banks are required to send a one-time password. For the customers, the rules not only provide safeguards, but offer transparency and are empowering too — with the facility to cancel the e-mandate before the debit, or withdraw at any point of time.
Bolstering the safety of card transactions has been high on the RBI’s agenda. Citing cyber and server security risks, in March last year it said that no merchants, including payment gateways and aggregators that process payments, should be able to store customers’ card details; only banks can. This could signal an end to single-click checkouts. Even as banks have begun notifying customers about the changes in processing any standing instruction for recurring payments, the user data of a mobile payment and digital wallet company allegedly being dumped on the Internet only proves how the banking regulator’s concerns are not misplaced.
The total number of real-time transactions worldwide in 2020, the year of the pandemic, was 70.3 billion, up 41 per cent from the previous year. India retained the top spot with a figure of 25.5 billion. If that’s considered a positive aspect, the worrying one is that globally, card-related fraud remains highest in terms of reported incidents from consumers. As governments promote digital transactions, securing the medium and upholding the rights of consumers become all the more important.