RedGiraffe, a financial technology and real estate company, has launched a product called RentPay which allows users to pay commercial and residential rentals to be paid via credit and debit cards through recurring payments. Currently, the product is live on SBI Cards, HDFC Bank, Kotak Mahindra Bank, YES Bank, ICICI Bank, IndusInd Bank and Axis Bank; we received an email from HDFC Bank regarding this partnership.

RedGiraffe says that card payments through their platform will allow users to strengthen their credit score and get cheaper home loans. CEO Manoj Nair told PTI that the company is targeting 100,000 customers of SBI Cards using RentPay by March 2018.

How recurring payments work on RentPay

– On RentPay, users need to fill in their details and upload the rental documents.They will also have to submit their landlord’s details which will generate a RedGiraffe id.
– Users will have to then register the id with their bank or card issuer.
They will have to leave standing instructions with their banks to deduct rental payments from their cards without a second factor of authentication like an OTP.
– RedGiraffe says that payments from cards will take at least 3-4 days to reach a landlord’s bank account. It also charges a
small bank transaction fee of 0.39% per transaction along with service tax.

Recurring payments in India

Note that recurring payments on cards for bills is picking up in India. Currently, payment gateways such as CCAvenue, Razorpay and Techprocess offer recurring payments through cards. In India, this has historically not been done because of the second factor of authentication requirement adds an additional layer of friction to the transaction.

While performing a recurring billing transaction, a customer has to give a consent before making the payment that authorises a merchant to charge the card. Note that the first transaction that is processed follows two-factor authentication. Payment gateways will pass the request to the bank in a batch or API, for processing in the back-end. Customers will get a message which informs them that the transaction was processed without the need to enter a second password.