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As A Result Of The RBI New Payments Rule, Tech Giants Brace For The Fallout In India.

As the central bank of the world’s second-largest internet market imposed a new directive. for how recurring payments are processed in this country, Apple, Sony, Google, Zoom, PayPal, and dozens of other technology companies, as well as dozens of banks, have warned customers and partners in India to expect an increase in rejected transactions.
The RBI has issued a directive that requires banks, financial institutions, and payment gateways to obtain additional approval from users for auto-renewable transactions worth more than 5,000 Indian rupees ($67) by providing notices, mandates, and Additional Authentication Factors (AF). The directive affects all those transactions for debit and credit cards.
The directive, which was first proposed in 2019, was supposed to go into effect in April of this year, but it was postponed until September 30 after banks and other stakeholders said they weren’t ready to comply.
Before deducting amounts for recurring payments, banks must now obtain account holder approval. The Reserve Bank of India (RBI) announced new self-debit rules on Friday as the next step in securing digital credit or debit card transactions. Recurring automatic payments for various top-ups and bills must now be protected with additional authentication factors under the new rules (AFA).
All banks, including RRBs, NBFCs, and payment gateways, have been ordered by the central bank to stop processing recurring domestic and cross-border transactions using cards, prepaid payment instruments (PPI), or Unified Payment Interfaces (UPI) without AFA.
Before deducting funds for certain purposes, banks must now get account holders’ permission. The new guidelines require banks to send customers a one-time password for recurring payments over $5,000.
Because banks were not yet ready to implement AFA, the deadline had to be pushed back several times. Recurring payments to utility service providers, as well as recharging of telephone, DTH, and OTT services, are all covered by the new car rule. The RBI directive on implementing AFA will cover all of these payments because they are now made through recurring deductions from registered bank accounts, UPI IDs, or digital wallets.
The new rules have been communicated to most banks’ customers. If you missed the announcement, here are five things to know about the RBI’s new automatic billing rules.

RBI
Image source: www.trustnodes.com

Early Accountholder Alert

Before deducting the amount from the registered account for recurring payments, banks must notify account holders 24 hours in advance. The reason for this is to ensure that customers are fully informed about all transactions involving their accounts. The bank will not be able to forward the money to the service provider unless the customer has acknowledged and completed the recurring payment.

One-Time Registration

If customers want to complete future transactions without additional authentication factors, they must first complete the registration process. Users will be able to make future transactions without having to repeat AFA, despite the fact that it appears to be an extra step. They can also specify a transaction’s validity period in the future.

OTPs For Auto-Debit

In accordance with the new direct debit rules, the bank must send a one-time password (OTP) to the account holder for recurring payments exceeding $5,000.

Choice To Opt-Out

Customers are not obligated to use AFA for recurring payments and can opt out at any time. The pre-debit notification that the bank will send to the customer to confirm automatic billing will also include a link that the customer can use to disable AFA. However, this will negate the additional security it provides.
Auto-Debits out of AFA
The new automatic debit rules will not affect permanent instructions to use an existing bank account for mutual funds, SIPs, or Equivalent Monthly Installment (EMI) for loans.

Apple Pay is the Next Payment Method Ride New York’s Subways

Metro cards are over twenty years old, and it seems the time has come to say goodbye to them. From the time metro trains have been in existence, people have been using those cards and tokens to pay for their subway rides. But now it won’t be the only method for payment, as Apple has announced that people will be able to transit through metro by paying using Apple Pay instead of the MetroCard.

apple pay for nyc subway
Image Source: techhnews.com

Yes! To initiate the usage of Apple Pay for paying for the subway rides, Apple has announced that the very payment method is coming to Organizations Transportation Metropolitan Transportation Authority (MTA). The new terminals have already been installed at a different New York City subway stations, including Union Square and Grand Central, such that for now, the riders will be able to pay for their rides on the subway’s 4, 5, 6 line through the Apple Pay app.

Starting from Friday this week, the passage where usually the metro card and the tokens are scanned, people will see a digital rectangular panel enclosed in blue light attached to the bottom part of the turnstile. Over the panel, instead of the metro card, the riders can scan their iPhone and even the Apple watch.

There are some compatibility criteria that one would need to fulfil in order to use the Apple Pay for the transit. First of all the OS for the iPhone must be updated at least up to iOS 12.3, and the watchOS must be 5.2.1 version. Apple Pay will reflect the Express Transit feature which will be available for iPhone 6s and SE or later. Same for the Apple watch, only the Apple Watch Series 1, 2 and 3, using NFC will be able to offer the feature. The user needs to authenticate their debit or credit card with the Express Transit features, such that to make payment through the Apple Pay app.

The method to use iPhone and Apple watch is quite simple and similar to the usage of MetroCards. The rider needs to place their iPhone or the Apple watch against the digital screen on the turnstile, and when the light turns green, a message of ‘Go’ is flashed on it, and the metal arm will be unlocked for the rider to pass through.

The same feature has also been announced by the other tech giant Google on its payment app Google Pay, that too will start operating from 31 May in select subway stations for the specific subway lines. In fact, for the Google Pay, the riders just need to download the app and attach the payment methods to it, and they can easily pay through their phones without opening the app or even unlocking their phones.