API Based eMandate
The recent Supreme Court Judgement on the Aadhaar ceased the use of Aadhaar based KYC services for private companies. Similarly, dependent solutions like the Aadhaar-based eMandate or eNACH have also had to be suspended.
However, the API (netbanking) based eMandate is here to save the day for all those companies who’s journey into digitisation has been disrupted by the Supreme Court Aadhaar verdict.
The judgement caused havoc in the Fintech, Banking and NBFC segments as the process of seeking mandate approval had been digitised using the Aadhaar based eMandate. The eNACH authentication system is estimated to have saved 95% of the bank’s transaction costs.
Discontinuation of the Aadhaar based eMandate is said to increase operational costs for players in the affected segments and has also raised fears of having to shift back to the physical process of approving mandates.
However, there is an API based eMandate solution that can be used to substitute the Aadhaar based eMandate. Even though the cost for eMandate through Netbanking is slightly higher than the Aadhaar based eMandate, it is still much lower than the costs involved in the physical process of seeking mandate approval.
What is the API Based eMandate?
The API based eMandate authorizes customers to provide eMandate acceptance using their Netbanking credentials. The service is also referred to as eMandate through Netbanking.
How Does eMandate Through Netbanking Work?
The eMandate through Netbanking works in a similar way to its previous counterpart. Instead of providing the Mandate acceptance through eSign, the customer provides mandate acceptance using their Netbanking login. This is how the process goes.
- The customer logs into the company’s website where they can view the details of the mandate.
- If the customer chooses to accept the mandate, they need to enter their bank account number. The company may also provide the option to select their bank account and the mode of authentication. The company needs to ensure that the banks listed are registered by the NPCI for ONMAGS.
- After that, the customer is redirected to the NPCI page where they can choose either Netbanking or Debit card authentication.
- Once the selection has been made, the NPCI ONMAGS interface will provide a list of banks that are registered for the particular authentication mode. In case the customer has already chosen the option on the company’s website, this option will be auto-filled.
- The customer is then redirected to the corresponding bank’s authentication website where they can authenticate the mandate using the option selected earlier.
- The bank validates whether the account number entered on the company’s website matches the account number through which the customer has authenticated the login.
- After that, the bank displays a summary of the Mandate and provides the customer with the option to accept or reject the mandate.
- Once the customer selects an option, they will be redirected back to the NPCI ONMAGS interface, and then back to the company’s website where the status of the Mandate approval will be displayed.
Advantages of the Netbanking based eNACH over the Aadhaar-based eNACH
The eMandate through Netbanking has a few advantages over its Aadhaar based counterpart.
The API based eMandate gets activated instantly unlike the Aadhaar based eMandate that took 2-3 working days to get activated
When it comes to authorising an eMandate through Netbanking, the customer only needs to login using their Netbanking credentials. While in the Aadhaar based eMandate, the customer needs to ensure that their mobile number is linked to their Aadhaar in order to do so. The recent judgement rendered this option invalid.
No Regulatory Concerns
Unlike the depreciated Aadhaar based eMandate, the API based eMandate does not have many regulatory concerns.
Get SignDesk’s API Based eMandate Solution
The best substitute for depreciated Aadhaar eNACH is the API based eMandate or eMandate through Netbanking. Considering that there are no regulatory concerns, companies can use the API based eMandate instead of shifting back to the physical process of getting mandates approved.
SignDesk provides companies with an interface through which they can display the mandate details to their customers and also seek their approval or rejection. Contact us to know more about SignDesk’s eMandate through Netbanking solution.