New Delhi | Jagran Business Desk: Most of the OTT platforms like Netflix, AmazonPrime, Disney+ Hotstar, Zee and several others have automated payment systems. They help in paying the monthly subscription fee of that platform. But, now these newly released guidelines from RBI which will come into effect at the end of this month, will put a pause on automatic renew of accounts and stop recurring payments. Your accounts won't be renewed automatically now.

The Reserve Bank of India had introduced a new rule to bring more safety and security to the recurring, monthly transactional process through the use of AFA that is an Additional Factor of Authentication. The new rule would encompass all the transactions made via credit cards, debit cards, UPI, and several other payment methods. These methods are mostly used for recurring payment of bills, subscriptions,s and more.

But, In March 2021 they had extended the date for the implementation of the rule to the end of September 2021. And now as the month is about to end, the new rule will come into effect from October.

What is the New Rule of RBI ?

According to the rule, Now the banks will have to inform their customers about the recurring payments at least 24 hours ahead of the debit to the card. This notification will likely be sent via SMS or email. The limit for auto-debiting from the customer’s card will be set to Rs 5,000. And if the amount is more, the user will have to provide a one-time password in order to transact the amount.

This rule will also eliminate the obligation and will let you discontinue the recurring payments, as you can opt-out without any extra charges being imposed on you.

Why the RBI rule is necessary ?

Highlighting the need for the new rule, the RBI said, “The primary objective of the framework was to protect customers from fraudulent transactions and enhance customer convenience."

The RBI further added, “The requirement of Additional Factor of Authentication (AFA) has made digital payments in India safe and secure. In the interest of customer convenience and safety in use of recurring online payments, the framework mandated use of AFA during registration and first transaction (with relaxation for subsequent transactions up to a limit of ₹2,000, since enhanced to ₹5,000), as well as pre-transaction notification, facility to withdraw the mandate, etc."

Posted By: Ashita Singh