New Indian mandate?

[59d47a53]

Hi,

I just got a message from my client, saying he got an Email from Upwork saying, "New Indian mandate may cause payments to fail". Is this true?

My clients wants to change the payment method from hourly to fixed price because of this. Will it affect the payment process in any way?

Kindly reply.

Thank you. 

[petra_r · Accepted solution]

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Swathi A wrote:

My clients wants to change the payment method from hourly to fixed price because of this.

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You are safer with hourly (if you track your hours correctly and use meaningful memos and have decent activity levels....). If you do, your payments are protected.

[59d47a53]

Thank you for replying so quickly and clearing up the confusion Petra. 

[JoanneP]

Hi Swathi,

We will automatically attempt to re-charge your client's credit or debit card to see if the payment will go through. However, if we cannot successfully charge their card, we may place a hold on their account until any past-due payments are made. It's best to also ask your client to please visit the Reserve Bank of India’s website for more information.

[59d47a53]

HIi, Joanne

Thank you for replying. Will convey the same to my client. 

[ashrafkhan81]

Swathi, 

the new mandate will affect only if your client is in India and using a card issued by an Indian bank. Even then, the new mandate applies only to recurring payments like subscription services. 

Upwork charges the client based on the number of hours logged by you, and by nature, it is neither a subscription nor recurring at a fixed interval. Unless you log exact same amount each week, which is possible but very unlikely! 

I suggest sticking to the hourly contract! 

[59d47a53]

Thank you Ashraf, for clearing the doubt for me. 

[petra_r]

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Ashraf K wrote:

the new mandate will affect only if your client is in India and using a card issued by an Indian bank. Even then, the new mandate applies only to recurring payments like subscription services. 

Upwork charges the client based on the number of hours logged by you, and by nature, it is neither a subscription nor recurring at a fixed interval. Unless you log exact same amount each week, which is possible but very unlikely! 

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As far as the banks are concerned Upwork payments are considered recurring (or fall under the wider umbrella of what they mean) because they are pre-authorized and processed without the client actually going through any payment process.

It is also not true that recurring payments have to be the same amount. And hourly contracts are charged every Monday at the same time. Recurring, in other words. "Recurring" is basically payments that happen without the card holder being present (virtually or otherwise) and without the cardholder taking any part in the process. The scope of this is wider than you claim it to be.

If there was no potential issue, there would clearly be no reason for upwork to send messages like that to clients in India with cards issued by affected banks, would there? I would hazard a guess they know what they are doing and wouldn't be sending those emails if it was just nonsense someone dreamed up...

[ashrafkhan81]

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Petra R wrote:

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Ashraf K wrote:

the new mandate will affect only if your client is in India and using a card issued by an Indian bank. Even then, the new mandate applies only to recurring payments like subscription services. 

Upwork charges the client based on the number of hours logged by you, and by nature, it is neither a subscription nor recurring at a fixed interval. Unless you log exact same amount each week, which is possible but very unlikely! 

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As far as the banks are concerned Upwork payments are considered recurring (or fall under the wider umbrella of what they mean) because they are pre-authorized and processed without the client actually going through any payment process.

It is also not true that recurring payments have to be the same amount. And hourly contracts are charged every Monday at the same time. Recurring, in other words. "Recurring" is basically payments that happen without the card holder being present (virtually or otherwise) and without the cardholder taking any part in the process. The scope of this is wider than you claim it to be.

If there was no potential issue, there would clearly be no reason for upwork to send messages like that to clients in India with cards issued by affected banks, would there? I would hazard a guess they know what they are doing and wouldn't be sending those emails if it was just nonsense someone dreamed up...

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Petra, 

Effective 01 Oct, all recurring payments or pre-authorized payments on a credit card will not be authorized by banks in India. It's a new guideline by the central bank of India to all banks in India. 

Cardholders using a card issued by an Indian bank will need to authorize each payment by visiting the merchant's website. That's why they are sending those messages to Indian clients. 

But if there are recurring payments set up for a merchant that is outside India, the new mandate will not affect those payments. 

If Upwork is going to charge the India issued card as an International merchant it should not affect it, but if they have an Indian subsidiary that handles Indian market that charge the cards it will affect them! 

[petra_r]

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Ashraf, I know. But this is COMPLETELY different to what you said in your first response.