Indian payments solution provider Razorpay has partnered with Mastercard to launch recurring payment interface called MandateHQ.
The API-based plug-n-play solution will help card-issuing financial institutions to enable recurring payments for customers.
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This comes after Reserve Bank of India (RBI), the central bank of the country, issued new regulation regarding online recurring payments.
The regulations made Additional Factor of Authentication (AFA) mandatory for all recurring transactions below INR5,000 ($67) made through debit cards, credit cards and other online payment channels.
Earlier all such transactions and recurring bill payments for subscription services were debited automatically from customers’ cards.
All financial institutions are required to comply with the new framework by 30 September 2021.
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By GlobalDataMandateHQ solution addresses this requirement and it can be integrated with any bank within seven days.
Currently, the company has signed agreements with three banks to integrate the technology with their payment infrastructure.
Additionally, the platform enables a 24-hour pre debit notification to the consumers as well as offer end-users a portal to manage card mandates.
Razorpay co-founder and CTO Shashank Kumar said: “With the launch of MandateHQ in collaboration with Mastercard, we stand in support of the RBI directive of making auto-debit transactions safer from potential fraud.
“While this has created a certain level of challenge for the ecosystem in how they will pay monthly bills post-September, we want to make it easier and faster for banks to implement the e-mandate framework issued by RBI and also ensure that businesses and end-consumers are not inconvenienced.
“I believe products like MandateHQ will now encourage more businesses to start and adopt subscription-based business models and I expect the subscription economy to scale up to 5-6x in the next year.”
Established in 2014, Razorpay focuses on providing technology payment solutions. Earlier this year, the company teamed up with Mastercard to make digital payments more accessible to MSMEs.
