What are the e-mandate requirements from the RBI for issuers and card networks?
The measures introduced by the RBI include:
Banks will need to register cardholders and create an e-mandate using a one-off process, using additional factor authentication (AFA), such as 3D Secure
Banks must alert cardholders at least 24 hours prior to charges taking place and give them the ability to opt out of transactions
Require recurring transactions over INR 15,000 (or equivalent in other currencies) to go through AFA each time
Learn more about the requirements from the RBI here.
Why has the RBI introduced these measures?
The RBI has introduced these measures to protect cardholder safety and provide additional security measures for card payments. Learn more here.
What is a standing instruction or e-mandate?
An e-mandate is a form of authorisation provided by cardholders to issuing banks which grants permission for recurring payments to be collected from the card. Any recurring payment arrangements (e.g. monthly subscriptions to over-the-top "OTT" services) need an associated e-mandate to be successful. The e-mandate needs to be registered and then validated using AFA, such as 3DS. Learn more about e-mandates and other requirements.
How is the industry currently adapting to these measures?
Most banks in India have updated their systems to support and manage e-mandates for cards. Major card issuing banks also support non-INR currency mandates on internationally accepted cards that are issued by them.
How is Stripe helping businesses adapt to these measures?
We have developed flexible solutions using Stripe Billing and Stripe APIs to comply with the regulations. Stripe's solutions support our users in registering e-mandates and issuing pre-debit notifications to customers. We will also trigger dynamic authentication, allowing your customers to only complete 3DS when required (e.g. for transactions above the RBI's threshold).
If you have recurring transactions that are failing, please follow our Impact assessment guide and update your integration for the e-mandate changes. Our guide explains how to update your integration to comply with this regulation.
What's the probable long-term effect on business performance?
Businesses that have not updated their integrations to support e-mandate changes are likely to encounter disruption to their subscription lifecycle management (e.g. decreased renewal rates) due to the required re-registration of existing subscriptions and additional 3DS requirements. This disruption is industry-wide and not unique to businesses that use Stripe.
Will this affect me if I am a business outside India taking payments from customers with cards issued in India?
Yes, the RBI's directive affects cross-border transactions for businesses accepting payments in all currencies from cards issued in India.
Are subscriptions in currencies other than INR exempt from these rules?
No. The regulations apply to INR as well as non-INR payments.
Stripe only supports non-INR e-mandates for specific currencies and for international (non-IN) businesses. A small set of issuing banks might still not support e-mandates for a particular currency yet. If an e-mandate cannot be created, you should consider alternatives such as bringing your customers back on session to complete the payment with 3DS.
See https://stripe.com/docs/india-recurring-payments for more details