Digital payments in India are growing rapidly, and along with this growth, improving user experience has become a key priority for the regulator. In this direction, the Reserve Bank of India (RBI) has introduced a significant change to e-mandate norms. Under the new rule, OTP will no longer be required for recurring payments up to ₹15,000, making auto-payments more seamless than before. This change is especially relevant for users of OTT subscriptions, SIPs, utility bills, and other regular payments.
Let us understand this rule in detail and see what it means for common users and investors.
What is the New RBI Framework?
The Reserve Bank of India (RBI) has implemented a new integrated e-mandate framework to simplify digital payments, which has come into effect immediately. Under this rule, recurring payments up to ₹15,000 can now be processed without any additional authentication, such as an OTP.
Earlier, authentication was required for every transaction. The objective of this change is to simplify the payment process and reduce the number of failed auto-debit transactions.
Additionally, the RBI has ensured that uniform rules apply across all platforms, addressing the issue of a fragmented system. It is now mandatory to provide users with a pre-debit notification at least 24 hours before every transaction, improving transparency.
RBI recently introduced another important rule regarding UPI. For more information, read the article ‘Why RBI Proposes 1-Hour Delay on UPI Transfers’.
What Will Change for Users?
The biggest impact of this change will be on the day-to-day digital payment experience. Earlier, auto-payments often failed due to missed OTPs or delays, leading to service interruptions. Now, payments up to ₹15,000 can be auto-debited smoothly without such issues.
However, the RBI has also strengthened user control. Users can now modify, pause, or cancel their e-mandate at any time. Additionally, receiving an alert before every transaction ensures users remain fully informed about when and how much money will be deducted from their account.
What Will Be the Impact on Which Payments?
The impact of this rule will vary across different types of recurring payments. Smaller, regular payments such as OTT subscriptions or electricity bills will now become completely hassle-free, while additional authentication will continue for higher-value transactions.
It is important to note that in some cases, OTP may not be required even for amounts above ₹15,000, such as insurance premiums and credit card bills, which fall under specific exemptions.
Wrapping Up
This step by the RBI marks a significant move towards making digital payments simpler, more secure, and user-friendly. While removing OTP requirements for payments up to ₹15,000 enhances convenience, mandatory notifications and improved control features ensure user security.
Overall, this change could accelerate the growth of India’s digital financial ecosystem, striking a balance between convenience and security.
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