Impact Of Tokenisation On RBI's Auto Debit Framework: Bane Or Boon?

Traditionally, India has been recognized among the most notable cash denominated jurisdictions in the world. While the government has sought to promote digital payments among the masses, the transition to cashless digital transactions has been slow and gradual. However, with the onset of the pandemic, digital payments in the country have grown exponentially.

AFA Restrictions

Recurring transactions are commonly used by customers for enabling periodic payments for digital content subscriptions, utility payments, etc. Most digital service providers operate on a subscription model wherein debit/credit cards of customers are auto-debited based on pre-determined billing frequency. Such deductions are automated and do not require the customer's pre-approval or a requirement of presenting the card at the time of debit.