Friday, March 11, 2011

RBI circular on MOTO-Mailer Order Telephone Order Donations

During the SAFRG Regional Workshop for South India in Hyderabad a question was asked from Anup Tiwari on whether credit card donations where donor just signs on the form would be acceptable in the future or not.

Before I answer this let me explain the topic a bit. Usually donors sign on a direct mail coupon or form sent through a field executive providing their credit card details and agreeing to donate. This is known as Mail Order. A person can also provide credit card details on the phone and authorise a donation. This is known as Telephone Order.

All these years Mail Order and Telephone order were a valid way for donation used by all fundraising NGOs in India. However, this is under review by Reserve Bank of India (RBI). According to RBI all transactions that use credit card without actual presentation of credit card, CNP- credit card not present, for example on-line donations, MOTO, punching credit card details on IVR- interactive voice response, need to build additional security systems.

MOTO was not intially part of this, but big stake holders like hotel industry that uses it extensively, expressed that it is also a subset of CNP but should be exempted from the proposed changes as above.

The latest circular from RBI mentions that MOTO is not stopped as of now. However, the bank and card companies have to revert by Feb. 28, 2011 on the process how MOTO transactions would be handled in a more secure manner.

I would keep you posted on how this progresses.

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