The Reserve Bank of India (RBI) has changed rules for recurring digital payments to make payments for subscriptions, SIPs and bill payments smoother. Under the new rules, the auto-debit transactions of up to Rs 15,000 can now be processed without requiring an OTP for every cycle, but only if the user has already approved the mandate once. With this, the authority wants to reduce the payment failures caused by missed authentication requests. The regulator has also raised limits for select categories, offering additional flexibility for higher-value payments.
The new rules suggest that the recurring payments up to Rs 15,000 can be processed automatically without fresh authentication after the first approval. This will now apply to your daily transactions such as OTT subscriptions, SIP instalments, utility bills and broadband payments.
In specific use cases like insurance premiums, mutual fund investments and credit card bill payments, this limit has been increased to Rs 1 lakh. This may benefit users dealing with higher-value recurring payments, eliminating the need for multiple verification steps.
Even after these changes, the users will still have to authenticate the initial mandate using OTP or another verification method. And if you want to use the auto debit payment feature within the above-mentioned limit, you will have to approve it once.
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The banks and payments platforms will still send you pre-debut alerts before each transaction takes place. These notifications will include details such as the amount, merchant name and scheduled date, followed by a confirmation once the payment is completed.
Many users complained that recurring payments often fail due to missed OTPs, poor network, or timing issues. By removing repeated authentication for smaller transactions, it will be a little easier for users to maintain their payments.
However, the users are advised to review their active mandates, as it will help avoid unnecessary charges from unused subscriptions or duplicate services.