The Reserve Bank of India (RBI) has unveiled a revised e-mandate framework, allowing recurring digital payments up to ₹15,000 to be processed without a one-time password (OTP) after an initial registration. This significant update is designed to enhance convenience for consumers while maintaining robust security measures for auto-debit transactions.
New Threshold for OTP-Free Transactions
Under the new guidelines, customers can register a one-time e-mandate using additional factor authentication (AFA). Once this initial approval is secured, subsequent recurring payments that fall within the ₹15,000 limit can be processed automatically without requiring an OTP for each transaction. This applies across various payment methods, including cards, Unified Payments Interface (UPI), and prepaid payment instruments (PPIs).
Transactions exceeding the ₹15,000 threshold will continue to necessitate additional authentication, providing an extra layer of security for higher-value debits. This balanced approach aims to prevent fraud while simplifying routine financial commitments.
Balancing Convenience and Security
The ₹15,000 cap is a pivotal element of the new framework, striking a balance between user convenience and fraud prevention. It facilitates seamless payments for common recurring expenses such as over-the-top (OTT) subscriptions, utility bills, Equated Monthly Installments (EMIs), and various memberships, eliminating the need for repeated approvals that can interrupt the user experience.
Simultaneously, by capping the OTP-free amount, the RBI limits potential exposure in the event of unauthorized transactions. This measure underscores the central bank's commitment to modernizing India's digital payment ecosystem while prioritizing consumer safety and trust.