Stripe RBI e-Mandate Impacts

The Reserve Bank of India (RBI) announced guidelines to streamline the process and security measures for card payments. According to the guidelines, payments will require Additional Factor of Authentication (AFA), especially for "card-not-present" transactions. These regulations impact the existing mandates set up for managing recurring payments. Learn more.

How will this impact my Stripe integration with Chargebee?

The following impacts may apply to your Stripe integration:

• Stripe's e-mandate creation is applicable to cards issued in India and INR currency only. Issuing banks and Stripe do not support the creation of e-mandates for non-INR currency. As a workaround for non-INR transactions, you can use Pay Now to process payments manually.
• Banks will trigger dynamic authentication to complete additional factor authentication (AFA) when setting up the mandate and for transactions that exceed INR 15,000. However, not all banks support dynamic authentication.
  • Note: Please reach out to Stripe for the list of supported banks.
  • Note: If the amount exceeds INR 15,000, the e-mandate will require AFA during the pre-debit notification.
• For sub-recurring payments, pre-debit notifications must be sent 24 hours before every renewal payment. However, you may experience delays of up to 3 days for payment confirmation.
• All existing customers will need to set up their mandates again after October 1, 2021, to ensure recurring payments can be processed without AFA.
  • Note: Failure to set up updated mandates with customers will require customers to complete AFA for recurring transactions after October 1, 2021.

Click here to access Stripe's help document.

What steps should I take to prepare for this change?

You must complete the following to prepare for this change:

• Contact Chargebee Support to enable the e-mandate workflow for your Stripe and Chargebee account. The Chargebee team will contact Stripe and get it enabled at both ends within a week and inform you. Make sure to plan your setup accordingly.

• You must ensure that 3DS authentication is enabled in Chargebee for your configured Stripe account.

• Configure your webhooks within Stripe, as all recurring payments are expected to take X+3 days to get a confirmation. This delay can be attributed to RBI guidelines for issuing banks to send pre-debit notifications to customers at least 24 hours before the payment can be made.

  • For example, if the payment is scheduled for the 1st of every month, the payment will be processed only on the 4th of every month.
  • Click here to read more about configuring webhooks.
  • Note: Ensure you select receive all events in your Stripe webhook settings.

• Ensure you have dunning enabled for your Chargebee site and configure dunning email notifications with the Pay Now feature to help your customers complete payments.

• Configure your dunning period for an increased number of days to allow a longer grace period for your customers to set up or re-authenticate a mandate or provide alternate payment methods and avoid subscription cancellations.

  • Communicate the changes with your customers and ensure they are aware of the need to come back online to set up a new mandate to continue their recurring payment without AFA after October 1, 2021.
  • Customers should be encouraged to use the Self-Serve Portal to proactively set up new e-mandates for their recurring payments.
  • You can use the Custom Email functionality to send notifications to your customers to update the AFA process for new e-mandates.
  • Additionally, you can use the Pay Now feature within the dunning emails to assist customers in setting up new e-mandates.

• The following changes may apply based on the Stripe integration with Chargebee:

  • If you are using Chargebee's hosted pages, required updates will be made at the backend to minimize any impact on you as a merchant.
  • If you are using a custom checkout with Chargebee.js, most updates are made at the backend to minimize any impact, but there is a minor update you need to do to your integration. Please read the recommended steps here.
  • If you are using a custom checkout with Stripe.js, this will require changes to the integration and you must contact Stripe Support to determine new parameters and API endpoints. You can also connect with our support team if you require additional assistance. Read more here.

  As a transitory solution, we recommend that you switch to using Chargebee's hosted pages until you are able to make all necessary changes to your custom checkout with Stripe.js integration.

Stripe e-mandates Setup

The e-mandate will encompass a broader scope to avoid the need for customers to complete the Additional Factor Authentication(AFA) for any minor changes in amount and frequency. The maximum amount and frequency of the mandate are set up as INR 15,000 and Sporadic (As presented) respectively.

• All subscriptions or changes to subscriptions and one-time payments will have to go through the AFA process.
• The e-mandate setup process can be initiated by a customer upon checkout or via the Self-Serve portal.
• The e-mandate setup process cannot be completed by the merchants on behalf of the customers.
• Now, e-mandates appear in the Merchant App as well.

Payment Workflow with e-mandates

The following workflow applies to the setup of an e-mandate as part of the checkout flow.

The following workflow applies to the recurring payments associated with an e-mandate.

Setup e-mandates

The e-mandate update process can be initiated by a customer using Chargebee's Checkout, Pay Now link, or Self-Serve Portal.

Checkout

The customer is directed to complete the normal checkout process. As part of this checkout, they would be notified about the need to set up e-mandates and their relevance to successful recurring payments. At the end of the checkout process, the customer will be redirected to the AFA (3D Secure) process prescribed by their issuing bank.

After successful completion of the authentication process, the e-mandate is set up and all subsequent recurring payments are scheduled for dedicated subscription cycles based on the e-mandate.

Dunning Emails with Pay Now Link

When a recurring payment fails, customers will receive dunning emails based on your configuration notifying them of the payment failure and including the link for the Pay Now interface.

The Pay Now interface lists unpaid invoices. Customers must select the invoices with identical Subscription IDs to set up a mandate for that subscription and complete the payment for those unpaid invoices during the AFA process completion.

Self Serve Portal

Customers can choose to utilize the Self Serve Portal to set up their e-mandates. The Self-Serve portal displays the customer's subscription details and directs them to review the notification and set up the e-mandate for their subscription.

After the successful AFA process, the e-mandate is set up for recurring payments and customers will be able to view the e-mandate ID associated with that subscription with the payment method.

After the successful AFA process, the e-mandate is set up for recurring payments and customers will be able to view the e-mandate ID associated with that subscription with the payment method.

Frequently Asked Questions (FAQs)

Why do customers receive the error “For recurring payment greater than mandate amount or INR 15000, payment was not approved by the card holder”?

Answer: This error occurs due to RBI e-mandate regulations applicable to recurring card payments in India. It is triggered in the following scenarios:

• The recurring transaction amount exceeds ₹15,000, or
• The transaction amount exceeds the registered mandate amount.

In such cases, the issuing bank must send a pre-debit notification to the cardholder at least 24 hours before the charge. The cardholder must explicitly approve this notification through the bank's authentication flow (for example, OTP or 3D Secure). If the cardholder does not complete the approval, the bank declines the transaction, resulting in this error. To resolve this, you can ask the customer to complete the approval via their bank's authentication flow or share a Pay Now link so they can manually complete the payment with authentication.