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Starting October 1, any standing instructions on your debit and credit cards will fail. This may mean that recurring payments such as OTT subscriptions, utility bill payments, insurance premiums — or any recurring payment linked to your card — is likely to fail. This is because the Reserve Bank of India has mandated the digital payments ecosystem to build and integrate into a common bill payments system. The RBI’s intention is to make cards-not-present transactions, such as your recurring electricity bill payment via your credit card, safer for you.

However, the payments ecosystem has taken its time to move to this new arrangement: the earlier deadline to integrate was April 1, but now it’s October 1. Here’s what will happen now.

Your recurring card payments will fail

The standing instructions you’ve created on your debit and credit cards will fail from October 1. As per RBI’s new regulations, you need to recreate the instructions on the new payments platform that your bank and merchant (Netflix, for example) must both integrate into. If your bank or your merchant haven’t completed the integration, you will have to settle your recurring bills through other means such as one-time card payments or netbanking biller payments.

What the new system entails

The new rules apply to recurring payments via debit and credit cards, UPI, and pre-paid cards. You must recreate your standing instructions on these instruments to ensure your bills keep getting paid on time. Secondly, bills above Rs. 5000 will require an additional authentication via OTP. Lastly, the new platform will alert you via SMS and email about upcoming bill payments so that you’re able to view, modify, or even cancel your recurring payments. On the whole, these payments will now happen with your knowledge as well as consent. This will reduce the pains that unwanted payments cause customers, banks, and merchants.

What about SIPs and EMIs

Let’s be clear about what the new rules apply to: your cards and UPI. They do not apply to standing instructions and payment mandates via your bank, such as your SIPs, EMIs, or bill payments via netbanking. They should continue as is, if they’re not linked to your cards. You must ascertain that no essential, non-negotiable payment is linked to your card – your insurance payment for example. You could easily renew a Netflix account, but a lapsed insurance policy could cause many complications. Reach out to your bank to understand which of your recurring payments could be impacted from October 1. This will help you avoid painful misses.

Watch out for bank instructions

As things stand, it seems many banks and merchants are yet to integrate into RBI’s proposed system. Therefore, you would not be immediately able to recreate your standing instructions on the new platform by October 1. In such a case, you’ll need to keep an eye on your bills, pay them manually through other ways, and avoid late payment penalties. Automated payments are essential to our financial life. Payment systems track our bills automatically and settle them before the due date, helping us avoid missed payments and penalties. The new platform will require you to recreate the instructions, which is a one-time pain, but your finances will be safer for it.

(The writer is CEO, Bankbazaar.com)