Auto-Debit System: There are going to be some changes in the auto-debit system associated with the digital payment platform, which will be applicable from October 1. Under the new rules, before bill payment through debit and credit cards, approval will be taken through an SMS on the registered number.
Auto-Debit System
There are going to be some changes in the auto-debit system associated with the digital payment platform , which will be applicable from October 1. Under the new rules, before bill payment through debit and credit cards, approval will be taken through an SMS on the registered number. The implementation of this rule will have an impact on recurring payments of customers. Platforms such as banks and payment aggregators have also started to inform their customers about this new auto-debit rules mandated by the Reserve Bank of India (RBI).
Banks like HDFC Bank,
ICICI and Axis have started sending SMS to their customers informing them about the changes. However, experts believe that all banks may fail to follow this guideline of RBI. Apart from this, merchants providing online payment facility may also face difficulties.
What is the new Auto-Debit System?
Auto Debit System means the facility when you keep the payment of bills like electricity, LIC, credit card in auto debit mode through your mobile app or internet banking. According to this, the amount is automatically deducted from the account or payment wallet on the due date. This arrangement was earlier to be implemented from April 1, but banks had sought more time citing lack of infrastructure. After which RBI postponed it for 6 months.
Why the need for a new rule arose
In fact, the Reserve Bank wants another layer of security on such payments. In view of the increase in the cases related to banking frauds in the recent past, the central bank understood the need for this. Earlier, after the payment is done, you used to get its information through SMS, but now you will get an SMS before auto debit. The bank will be able to deduct the amount from the mobile wallet or account only after receiving your response.
Who will be affected
The impact of the new rules will be on banks as well as platforms like Paytm and PhonePe, which provide mobile wallet facilities. Now they have to take customer’s approval every time before EMI or bill payment. Experts believe that this is a good step in terms of security, because many times thugs used to transfer money through links. Now after deducting money, a message will come to you, only after its approval, the amount will be deducted from the account.
