Tipping point: What is e-mandate for recurring payments transaction?

If you make regular payments to merchants through debit, credit or prepaid cards, you can now set up a mandate for automated payments. Just as an equated monthly instalment (EMI) is deducted from your bank account regularly, you can now make similar recurring pay­me­nt to merchants. The Reserve Bank of India has capped the amount for such recurring payments at Rs 2,000. There will be no charges. 

The user needs to complete a one-time registration procedure. An option will be given to provide e-mandate for either a fixed value or a variable value. Any change in the mandate will need authentication again. To mitigate risk, the issuer needs to send a pre-transaction notification to the cardholder at least 24 hours prior to the actual charge. The card user can withdraw the e-mandate at any point of time. The exception will be a pipeline transaction for which pre-transaction notification has already been sent.