E-mandate Facility: As per the notification issued on August 21, the Reserve Bank of India (RBI) has permitted the processing of e-mandates on cards for recurring merchant payments from September 1, 2019. This means that the customer need not go through the two-factor authentication process every time a similar transaction is carried out with the same merchant.

If you make regular payments to merchants through debit, credit or prepaid cards, you can now set a mandate for automated payments, just like it is currently possible to do with bank accounts. However, there are certain conditions and steps to be followed.

E-mandate Facility: Key Points

  • The credit or debit cardholder can give a mandate to the card issuer for automated payments to a merchant.
  • The new e-mandate facility on credit, debit cards come into effect from September 1.

This e-mandate facility, which is currently available with bank accounts, allows the financial institution to automatically debit the amount from the bank account. The new rules come into effect from 1 September and are applicable for transactions performed using all types of cards – debit, credit and prepaid payment instruments (PPIs), including wallets.

The card user can withdraw the e-mandate at any point of time, the RBI said. RBI said that the facility will be reviewed and may be extended to other digital modes of payments going forward.

The two-factor authentication involves a customer-generated password and a one-time-password provided by the issuer to complete a transaction. But now the customer can combine this process with the e-mandate and allow automatic processing of such transactions.

For this, the card user will be required to complete a one-time registration to set the e-mandate. An option will be given to provide e-mandate for either a pre-specified fixed value or a variable value. Any change in the mandate will need authentication again.

E-mandate Facility: Things to know

  1. The credit or debit cardholder can give a mandate to the card issuer for automated payments to a merchant. The maximum limit for a transaction under this facility is Rs 2,000.
  2. The new e-mandate arrangement on credit, debit cards or wallets will be only for recurring transactions and not for a ‘once-only’ payment, the RBI said.
  3. The cardholder – debit or credit – will not be charged extra for availing this e-mandate facility on cards for recurring transactions.
  4. A debit or credit cardholder who wants to opt for this e-mandate facility on cards will have to undertake a one-time registration process, with AFA (additional factor of authentication) validation by the issuer.
  5. If the debit/credit holder wishes to withdraw the e-mandate at a later stage, the cardholder will have to give an online facility to the cardholder to opt-out.
  6. In respect of withdrawn e-mandates, the acquirers shall ensure that the merchants on-boarded by them, delete all details, including payment instrument information, the RBI said.