Razorpay & Mastercard to enable banks comply with RBI diktat on recurring payments – Times of India

MUMBAI: Razorpay has partnered with Mastercard to launch Mandate HQ – a payment interface that puts customers in control of recurring payments. Mandate HQ is a plug-n-play solution that allows customers of any bank to automate recurring payments without storing card details with the biller and have the option to discontinue payments with a click.
The new platform has been launched to enable banks to comply with a new RBI mandate that requires banks to intimate cardholders a day in advance before every debit through a text message. Banks are also required to send customers a link to unsubscribe with the text.
Currently, service providers give the recurring payment facility by storing the customers’ credit card details. RBI had earlier given banks a deadline of April 2021 but extended it to September this year as many banks did not have their systems in place.
Speaking to TOI, Harshil Mathur founder of Razorpay said that with its new platform a bank could be compliant with RBI’s guidelines in a week. “Although we have partnered with Mastercard the platform will work for Visa and Rupay networks as well. “We plan to take 20 banks live so that they are compliant with RBI guidelines by September 2021,” he said.
According to Mathur, RBI’s new guidelines will give a big boost to recurrent payment transactions and consequently to digital payments. He said that at present customers are reluctant to commit because of fears that the monthly debits would continue even if they wished to discontinue.
He said that this would also bring down the number of card disputes as in many cases the customer is aware only after the debit that the payment has taken place.
“Before this, there was no clarity on what kind of recurring payment allowed. With this clarity, we could see a jump in the subscription economy. Last one and half years 10-15% of payments on recurring we expect this to go up to 25-30% as most of the payments are recurring in nature, but today customers do it themselves as they want to be in control,” said Mathur.
He said that this would not significantly add to the costs as the recurring payments would not require fresh authorisation. “The cost of generating an OTP will be replaced with the cost of sending the SMS alert,” he said.

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