Following the Reserve Bank of India’s plans of upping the limit of recurring payment mandate from ₹5,000 to ₹15,000 per transaction, industry players welcomed the move, saying this would help in paying for monthly utilities easier and become truly digital.
While addressing the media on Wednesday, T Rabi Sankar, Deputy Governor of RBI, said, “We have tried to address some of the issues with the recent announcement of increasing the limit. We heard from many people, that some of the international products like magazines get very expensive, so we increased the limit from ₹5,000 to ₹15,000 this year…The objective of the e-mandate is that the customer should have better control and objectivity over their payment activities. That’s our ultimate goal and that will continue.“
“We are moving towards a business ecosystem where customer convenience comes first. The recent move by RBI to hike the limit for recurring payments to ₹15,000 without any additional factor (OTP) is a testimony to the same. The hike will stretch a helping hand for customers to keep a track and monitor their recurring payments. The e-mandate with an increased cap will cater to timely payment of standard common expenses like education fees, electricity bills, rents and insurance premiums,” Vikas Garg, Co-founder and CEO, Paytail, told BusinessLine.
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“The move is expected to further streamline the system and give customers a hassle-free experience in their finances. It also creates opportunity to include more players in the financial ecosystem from insurance, loan as well as education sectors, thus giving an overall boost to the economy,” he added.
The recurring payment mandate was implemented on October 1, 2021, disrupting businesses of several smaller start-ups and organisations dependent on their monthly subscription fees.
Dewang Neralla, CEO, NTT DATA Payment Services, too concurred. He said, “It is a welcome move by the central bank. Increased limit will lead to increased convenience for the consumers as well as concerned businesses such as monthly pay-outs done for paying school/college fees, electricity bill payments, mobile payments and lending organisations. The mandatory notification 24 hrs prior to the auto-debit shall ensure that the consumer is warned ahead in time to maintain the requisite card balances.”