Online Transaction Fails but Money Deducted? Know How to Secure a Refund

Vishal Shukla December 22, 2023

Shopping on international websites can be a delightful experience, but it often comes with challenges, especially when online transactions go awry.

Many customers find themselves in a predicament where they attempt to make a payment on international websites, only to encounter payment failures through debit or credit cards.

This unfortunate scenario results in money being deducted from their bank accounts. If you find yourself in this situation, here’s how to navigate it.

Understanding the Reasons Behind Failed International Transactions

In October 2021, the Reserve Bank of India (RBI) implemented a series of rules governing payments and auto debits via Indian debit and credit cards for international payment websites.

If an international website doesn’t adhere to RBI’s payment guidelines, they may refuse to accept recurring or single payments from Indian cards.

However, it’s crucial to note that sometimes the website itself isn’t responsible for the payment decline.

Exploring the Causes of Online Payment Failures

Several factors can contribute to payment failures on international websites. Some websites may not accept card payments from specific regions.

Indian cards are occasionally blocked for payment purposes, or there may be currency or business restrictions that result in transaction failures.

What to Expect When an Online Payment Fails

If your international online transaction fails, and money is deducted from your bank account, there’s no need to panic.

In such cases, the money is typically automatically refunded after a certain period. The Reserve Bank of India (RBI) has established a timeline within which failed transaction funds are returned.

Typically, you can expect the money for a failed transaction to be reversed within T+5, meaning within 5 days after the initial transaction.

Steps to Take If Money Isn’t Refunded Within 5 Days

Should the bank fail to return the money within this 5-day window, the RBI mandates that the bank compensate you at a rate of Rs 100 per day for each day the refund is delayed after the T+5 period.

This provision is outlined in the RBI’s guidelines. It’s important to note that if an international website doesn’t accept payments through Indian debit or credit cards, alternative payment methods may be available to complete your transaction.