updates to RBI E-mandates

Stripe India RBI e-Mandate Updates

The Reserve Bank of India (RBI) announced a new directive governing the processing of recurring payments to issuing banks, card networks, Unified Payments Interface (UPI), and Prepaid Payment Instruments (PPIs) issuers. This directive came into effect starting October 1, 2021, and will affect all customers with Indian-issued bank debit or credit cards (including 3DS cards) as their payment method.

What are e-mandates?

E-Mandate is a digital payment service, initiated by RBI, for customers to virtually authorize merchants to collect recurring payments using debit cards or credit cards.

RBI’s new guidelines:

  • To make it easier for card holders, RBI has mandated Additional Factor Authentication (AFA) for registration and first transaction of recurring subscriptions / transactions.

  • RBI now requires banks to provide notice at least 24 hours prior to the recurring transaction being processed as well as written notice after the transaction is successfully processed.

  • AFA is now mandatory only for transactions that exceed INR 5000 (increased from the previous INR 2000 threshold).

  • Banks must allow the cardholder to withdraw an e-mandate at any point in time and immediately stop all recurring payments.

  • E-mandate creation or modification must be supplied free of charge .

We recommend reviewing RBI’s notifications for latest updates.

Risks of non-compliance:

If these guidelines are not followed, recurring payments from a card issued in India will fail. Customers will instead be required to make one-time payments, completing the mandate process each time.

Your next steps:

  • Communicate the changes with your customers and ensure your customers are apprised of the need to come back online to set up a new mandate to continue their recurring payment without AFA post-October 1, 2021.
    • Customers must be encouraged to use the Self Serve Portal to proactively set up new e-mandates for their recurring payments.
    • You can utilize the Custom Email functionality to send notifications to your customers to update the AFA process for new e-mandates.
    • Additionally, you can utilize the Invoice public-facing URL feature along with the Dunning emails that assist with failed payments.
  • The following changes may apply based on the Stripe integration with Chargify:
    • If you use Chargify’s Hosted Pages, required updates will be made at the backend to minimize any impact for you as a merchant.
    • If you use Custom Checkout with Chargify.js, most updates are made at the backend to minimize any impact, but you need to make a minor update to your integration. Please read the recommended steps here.
    • If you use the Billing Portal, required updates will be made at the backend to minimize any impact for you as a merchant.
    • If you use the Self Service Link, required updates will be made at the backend to minimize any impact for you as a merchant.

Additional Resources

If you’d like to learn more about RBI’s recent changes or how to manage these changes within Chargify, please reference the following resources.

  • Public Signup Page documentation (including how Chargify handles 3DS payments) - Chargify Help Docs

  • Important updates to RBI regulations on recurring card payments in India - Stripe

  • Tech giants brace for impact in India as new payments rule goes into effect - TechCrunch