Razorpay, Mastercard launch solution for recurring payments
Payment resolutions provider Razorpay declared Tuesday that it has partnered with Mastercard to start MandateHQ, a payment interface that will help card-issuing banks facilitate recurring payments for their customers. MandateHQ with more exceeding than 50 banks in the next year.
The RBI (Reserve Bank of India) had published a framework for preparing inquiries concerning recurring online transactions. It has made the AFA (Additional Authentication Factor) mandatory for all recurring transactions under Rs 5,000 on debit cards, credit cards, UPI and other prepaid payment instruments (PPI), and all parties involved must ensure full compliance with the framework before September 30, 2021.
The policy applies to all recurring payments previously automatically deducted from customer cards (credit/debit /prepaid) for cell phones, utilities, other recurring bills, as well as subscription payments as OTT streaming services
“Razorpay Mandate HQ is an API-based plug-and-play solution that will reduce the go-live time for any card-issuing bank that wants to enable their customers to make recurring payments. MandateHQ will also give companies, especially subscription-based ones, access to a wider customer base Allow using debit cards. Cards as payments are recurring. Rents used to be mostly made through credit cards, “said CTO and Razorpay co-founder Shashank Kumar
The MandateHQ solution can be completely integrated with every bank in seven days, unlike different solutions that typically need a few weeks, he continued.
In addition to partnering with Mastercard, Razorpay has also worked with three banks and is in talks with more than 20 banks to integrate this technology into their existing payment infrastructure in the coming weeks. However, the companies did not make the names of the previously registered banks.
“We aim to combine MandateHQ with 50 different banks by next year. As product adoption grows, we expect smaller inland banks in India to also strengthen their offerings by enabling recurring payments to millions of customers and businesses for the first time it met RBI guidelines, “he said.
MandateHQ will turn the underwriting economy Expected to increase up to 56x in the next year, he added. MandateHQ is a unified platform that helps banks with their lifecycle management, including creating, viewing, updating, cancelling and pausing mandates and processing direct debits.
In extension, the MandateHQ platform will also benefit the bank to enable a 24-hour pre debit notification through email, SMS, and WhatsApp while giving end-users a gateway to manage card mandates.
“Shortly after the announcement of the first RBI circular in 2019, we began thinking regarding a plug-play solution. We’ve spent a lot of time talking to banks, card networks and subscription-based companies to understand the vulnerabilities in order to develop the best solution possible to address them, “said Kumar.
He added that product development for MandateHQ started late last year started and after a few months of testing the company is now ready to offer banks across India the solution between 2025 billion rupees.
In the last two years, there has been a 3-fold growth in recurring payments, which thanks to the emergence of new subscription-based business models continue to increase by a 40 per cent year-on-year increase said, Kumar.
Industries like OTT platforms (especially regional ones), edtech, food technology, health technology and sharing economy are among the top industries that have benefited the most. Most transactions are under Rs 5,000. As a general rule, it was noted that a client can use multiple commands that can have different transaction values.
Kumar stated MandateHQ is a white label product that provides end-users with a portal to observe and manage all current mandates and the history of all transactions. Banks will notify customers 24 hours before uploading a mandate so that a consumer has enough time to change or cancel a payment, he added.