The auto-debit payment system is set to change from October 1, with the new auto-debit payment system expected to be introduced from October. Under this rule, digital payment platforms like banks and Paytm-Phone Pay will have to be approved every time before deducting installments or bill money. They have to make changes to their system so that money is not deducted automatically every time they get permission. RBI had earlier reported that repaying transactions using debit cards, credit cards, UPI or other prepaid payment instruments (PPI) would require additional factor authentication (AFA).
What happens in auto-debit system?: Let us tell you that auto-debit means that you have put electricity, gas, LIC or any other expenses in auto debit mode through mobile app or internet banking will automatically be deducted from the account on a certain date. If the auto-debit rule comes into force, your bill payment method may also be affected. To avail of this feature, you need to update your active mobile number to the bank. This is because the auto-debit notification on your mobile number will be delivered to you through SMS.
Message to be sent first: For your information let us tell you that after the new rules are implemented, a notification will be sent to banks on the customer's mobile 5 days before the payment due date. Reminders will start coming 24 hours before payment. The reminder will contain information about the date of payment and the amount of payment etc. Which also has the option of opt-out or part-pay. The rule will be implemented after September 30 and from October 1. In addition, OTP system has been made mandatory on payments of more than 5000.
The aim is to prevent banking fraud: Not only that, the RBI is going to issue this guideline, keeping in view the banking fraud and the safety of customers. As per the present arrangement, digital payment platforms or banks deduct from the customer's account every month without notice once they seek permission from the customer. This is increasing the chances of fraud. But now this change has been made only to eliminate this problem.