Electronic money order limit for recurring payments increased to Rs 15,000

RBI MPC Decisions: The Reserve Bank of India on Wednesday (June 8th) increased the mandate limit on recurring card payments, both credit and debit, from Rs 5,000 to Rs 15,000 per transaction. The decision was announced by RBI Governor Shaktikanta Das during the bi-monthly monetary policy committee meeting that day.

“The electronic mandate-based recurring payment processing framework was introduced by the Reserve Bank with the benefits of convenience, safety and security in mind for users,” Das said in his statement of the day. . “Under this framework, more than 6.25 crores of money orders have been registered in favor of a large number of domestic merchants and more than 3,400 international merchants,” he added.

“To further facilitate recurring payments such as subscriptions, insurance premiums, higher value tuition fees under the framework, the limit is increased from Rs 5,000 to Rs 15,000 per transaction,” said the Governor of the RBI. “This will further leverage the benefits available within the framework and increase customer convenience,” Das added.

The framework on the processing of recurring payments based on an electronic mandate, among other things, provides for an additional authentication factor (AFA) when registering, sending a pre-debit notification, subsequent recurring transactions to run without AFA and an easier way to withdraw those warrants, the RBI later said in a statement.

The RBI said that with the electronic money order for recurring payments, users enjoy safety, security and convenience. “Convenience, safety and security benefits are available to users. The system also enjoys user trust. Big banks are providing the facility and transaction volumes are seeing good traction,” he added.

According to the RBI, requests have been received from stakeholders to increase the limit in the framework to facilitate higher value payments such as subscriptions, insurance premiums, education fees, etc. it is proposed to raise the limit from Rs 5,000 to Rs 15,000 per recurring payment. The necessary instructions will be issued shortly,” the RBI statement read.

What is the e-mandate for recurring transactions?

An e-money refers to the holder of a debit or credit card giving a standing instruction to the merchant platform like a website or mobile app to deduct a certain amount of money for recurring transactions. This includes subscriptions on OTT platforms, gas bill payments, electricity bill payments, etc.

By means of an e-mandate, the cardholder gives his consent to merchant platforms to debit his credit or debit card for recurring payment requests that merchants may send. This is subject to the limit and validity specified by the cardholder. With the new RBI rule, the electronic money order limit has increased from Rs 5,000 earlier to Rs 15,000 per transaction. According to RBI rules, card issuers or banks must notify the cardholder at least 24 hours in advance for automated charges.

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