Complete Guide on Recurring Transactions in India

Recurring payments/transactions are conducted via Credit Cards/Debit Cards/UPI when you give permission to a merchant to deduct payments for any goods/services from the account. Also known as subscription-based payments, several industries have this model in place that allows customers to automate payments monthly/quarterly/annually for products/services used.

If you make payments for such products or services, you can set up recurring billing on your Credit Card for hassle-free payments. Here’s what you should know about recurring Credit Card transactions in India:

Regarding recurring online transactions, the Reserve Bank of India (RBI) issued a new framework wherein it has mandated all stakeholders to use AFA (Additional Factor of Authentication) for all recurring transactions below INR 15,000 carried out via Debit Cards, Credit Cards, UPI, and other Prepaid Payment Instruments (PPIs) and on first transaction on a subscription, AFA is mandatory. RBI initiated the new framework on 1^st October 2022.

• Customers will receive a notification via SMS & email 24 hours before the deduction of the amount
• The notification will contain details about the name of the merchant, transaction amount, date of debit, reference number of transaction and the reason for the debit
• The cardholder can approve or disapprove the transaction

1. Entertainment and Content Providers

2. SaaS and Tech Businesses

3. Retail and E-Commerce

4. Financial & healthcare services

5. Utility Billing

Planning to set up recurring payments via Credit Cards? Here are some tips to help you begin-

1. Find a Good Recurring Bill Solution

Most people use their Credit Cards for recurring transactions. But if you’re yet to apply for a Credit Card, select one that aligns with your spending needs and offers a wide array of benefits. For instance, AU Small Finance Bank offers a range of tailor-made Credit Cards to meet customer needs.

2. Payment Frequency and Amount

You’ll have to set up an e-mandate on your Credit Card for recurring payments. It is a simple online process where you choose the payment frequency, amount, and date on which your card will be charged. 

But before you set up recurring payments on your Credit Card, don’t forget to compare the payment plans offered by the product/service provider, as the benefits and savings could significantly vary between plans.

3. Security

Security is also a matter of concern for recurring Credit Card processing. Therefore, you should only choose a reliable Credit Card provider like AU Small Finance Bank that allows you to manage card-related activities online.

From setting/resetting Credit Card PINs, enabling/disabling transaction types, and viewing account statements to blocking lost/stolen cards, the Small Finance Bank ensures enhanced online convenience.

• LIT Credit Card
• Zenith Credit Card
• Vetta Credit Card
• Altura Plus Credit Card
• Altura Credit Card

Visit AU Small Finance Bank’s website or download AU 0101 App to learn more about the feature-packed Credit Cards offered by the bank and begin the application process. 

• Recurring payments eliminate the burden of making manual transactions every month.  
• It is beneficial not only to customers but also to merchants in several ways.
• You, too, can enjoy the convenience of recurring payments by applying for a new Credit Card with AU Small Finance Bank.

Sources:

https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12002

https://www.livemint.com/money/personal-finance/new-credit-debit-card-rule-for-recurring-payments-kicks-in-from-next-month-details-here-11632628315861.html

https://www.rbi.org.in/scripts/FS_Notification.aspx?Id=12341&fn=9&Mode=0

Read More : Differences between Credit Card, Debit Card & UPI