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Debit and credit card OTP rules have changed; be aware of the new rules before making a purchase

Writer: YashJYashJ

The Reserve Bank of India (RBI) has upped the minimum amount limit for payments through debit and credit cards that require e-mandates or standing instructions to Rs 15,000 from Rs 5,000 in an effort to make digital recurring payments easy. It indicates that One Time Passwords (OTPs) are no longer necessary for recurring payments made through cards or other prepaid payment instruments up to Rs. 15,000 in India (PPIs). With the new limit in place, clients now have it easier to use e-mandates to make payments on loans or savings.

"It has been decided to raise the limit from Rs 5,000 to Rs 15,000 per transaction and shall take effect immediately, following a review of the implementation of the e-mandate framework and the protection afforded to clients, "In a notification, the central bank stated.


Recently, RBI Governor Shaktikanta Das revealed that stakeholders have asked for a raise in the framework's ceiling to allow for payments of higher value, including as subscriptions, insurance premiums, and tuition, among other things.

He added that the framework for processing e-mandate-based recurring payments was introduced to give customers the advantages of convenience, safety, and security. The decision was made to promote customer convenience, he said.


An electronic mandate (e-mandate) on a debit or credit card indicates that the cardholder has given a merchant platform, such as a website or mobile application, a standing order to withhold a specific amount of money for recurrent transactions. This covers OTT platform subscriptions, bill payments, insurance premiums, etc. The cardholder authorises merchant platforms to debit their credit or debit card for any regular payment requests that merchants may send by submitting an e-mandate.


Additionally, the central bank now permits credit card holders to link their cards with UPI (unified payments interface). "A low-level interface between credit cards and UPI is envisioned, "Governor of the RBI has remarked.


Das added that this option will be made available following system developments, and that it will initially be enabled on Rupay credit cards issued by the RBI-promoted NPCI.

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