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.