Recurring Card Payments and Free Trials in India: What the RBI’s E-Mandate Framework Requires of Banks and Payment Providers

Many free trials move to paid billing automatically unless the customer cancels. In India, when that billing runs on a card, a prepaid payment instrument (PPI) wallet or UPI, the Reserve Bank of India (RBI) sets rules for how the recurring charge must be authorised and notified. This guide covers India only and is general information, not legal advice. It does not describe any brand’s trial terms, which change often and must be read on the merchant’s own pages.

The framework that applies in India

The RBI issued the “Digital Payments – E-mandate Framework, 2026” on 21 April 2026. It states that it consolidates earlier circulars on e-mandates and took effect immediately. It repeals eight earlier circulars, dated from August 2019 to August 2024. It applies to payment system providers and participants in the processing of recurring transactions, domestic or cross-border, that use cards, PPIs or UPI.

An “e-mandate” is a customer’s registered standing instruction for repeat payments. A free trial that converts to a paid plan, or a monthly plan that renews, is the kind of arrangement the framework is designed for. The rules bind banks (issuers) and payment participants, not the trial advertiser directly. A merchant’s own duties are covered separately, under India’s consumer protection law.

Registration and the first charge

The Directions set out the following sequence for a customer who opts into an e-mandate:

• Registration is a one-time process, and the mandate is registered only after successful validation of an additional factor of authentication (AFA), on top of the issuer’s normal process.
• Each mandate must specify a validity period. The issuer must give the customer a facility to modify the validity period or withdraw the mandate at any time, and must communicate that facility clearly at registration.
• A mandate can be for a fixed amount or a variable amount within an overall RBI cap. For variable mandates, the customer must be able to set a maximum value for any single recurring charge.
• The first transaction under the mandate needs AFA validation. If it is processed together with registration, the two checks can be combined.
• Changing or withdrawing a mandate also requires AFA validation by the issuer.

Notices before and after each charge

The issuer must send a pre-transaction notification at least 24 hours before the actual debit. At a minimum it must show the merchant’s name, the amount, the date and time of the debit, the e-mandate reference number and the reason for the debit. The customer can choose or change the channel for these notices, such as SMS or email.

The issuer must also provide a way to opt out of a particular transaction or of the whole mandate. The opt-out is validated with AFA, and the customer is sent an intimation. After the charge, a post-transaction notification must show the merchant, amount, date and time, the transaction and e-mandate references, the reason and details of grievance redressal. Pre-transaction notification is not required for mandates that auto-replenish FASTag or National Common Mobility Card balances.

Amount thresholds

Recurring transactions can be authorised without AFA up to ₹15,000 per transaction. Anything above that amount is subject to AFA. A higher figure of ₹1,00,000 per transaction applies to insurance premiums, mutual fund subscriptions and credit card bill payments. The 24-hour notice and opt-out facility are not tied to these amounts in the Directions.

Disputes, liability and charges

• Issuers must have a dispute redressal system so customers can lodge grievances.
• RBI instructions on limiting customer liability for unauthorised transactions also apply to recurring transactions under e-mandates.
• No charge may be levied on the customer for using the e-mandate facility.

What the framework does not do

The Directions regulate authentication, notification and revocation. They do not say how long a trial may last, whether a trial must be offered without a payment instrument, or what a merchant must disclose in its advertising. Those points fall under consumer law. The Central Consumer Protection Authority’s Guidelines for Prevention and Regulation of Dark Patterns, 2023, issued on 30 November 2023 under the Consumer Protection Act, 2019, list “subscription trap” and “SaaS billing” among specified practices. The illustrations include forcing a user to provide payment details or auto-debit authorisation to get a free subscription, and giving no notification when a free trial converts to paid. The guidelines state that these illustrations are guidance only and are not a binding interpretation of law, so whether a given design breaches them depends on the facts.

Practical checks before starting a trial

• Note the trial end date and the first billing amount shown at checkout.
• Keep the notification channel registered with the bank active, because the 24-hour pre-debit notice is the main warning before a charge.
• Use the issuer’s mandate withdrawal or opt-out facility if the plan is no longer wanted, and also follow the merchant’s own cancellation steps.

The wider free trials FAQ on this site explains the general mechanics of trials in non-technical terms.

Common questions

Does a free trial always create an e-mandate?

No. The framework applies when a recurring transaction is set up on a card, PPI or UPI. Whether a particular trial uses that route depends on the merchant’s checkout and terms.

Can I stop a charge after the notice arrives?

The Directions require the issuer to offer an opt-out from a particular transaction or the whole mandate, validated with AFA. The timing and process are set by the issuer within that rule.

The bottom line

In India, recurring payments on cards, PPIs and UPI run under an RBI framework that requires authentication at registration and on the first charge, a notice at least 24 hours before each debit, an opt-out and mandate withdrawal facility, and a grievance route. The framework protects the payment step; it does not decide whether a trial advertisement is fair or what the trial terms are. Those still need to be read carefully, and the dark patterns guidelines add consumer-law context without being binding interpretations.

Sources

• Digital Payments – E-mandate Framework, 2026 (RBI/DPSS/2026-27/396, 21 April 2026) (rbi.org.in)
• Guidelines for Prevention and Regulation of Dark Patterns, 2023 (Central Consumer Protection Authority, Gazette of India, 30 November 2023) (ccpa.doca.gov.in)
• Central Consumer Protection Authority issues Guidelines for Prevention and Regulation of Dark Patterns, 2023 (pib.gov.in)