Visa debit cards can now be used for investing in mutual funds

3 mins read . 28 Sep 2023 . 06:36 AM

On September 27, Visa launched an initiative that allows consumers to participate in mutual funds using their debit cards. The service, which was developed through a partnership with Razorpay, is currently accessible to Federal Bank and ICICI Bank users. With the Indian mutual fund industry's average assets under management valued at Rs. 46.94 lakh crore in August 2031, a six-fold increase in ten years, this move would allow regular investors to benefit from the security of using their debit cards for mutual fund investments.

Consumers can now set and change their transaction limits when investing in mutual funds using their Visa debit card. By logging onto their bank's subscription management websites, customers may also view all of the SIPs linked to their debit card as well as other recurring payments, according to Visa.

"Starting with Federal Bank and ICICI Bank debit cards, this service will soon be available to more Visa cardholders in India. We believe debit card payments with its inherent benefits offer a strong alternative to current payment methods, helping build investor trust and ensuring they can invest with ease and confidence,” said Ramakrishnan Gopalan, Head of Products and Solutions, India and South Asia, Visa.

Arif Khan, Chief Innovation Office, Razorpay said, “With Debit Cards, customers can conveniently initiate investments, significantly improving success rates for TPV-driven payment flows by 60-80 percent."

Bijith Bhaskar, Head – Cards, Digital Payments & Consumer Finance, ICICI Bank, said “With this offering, crores of ICICI Bank debit card customers will be able to invest in mutual funds using their debit cards in a secure and simple manner.”

The consumer can select a mutual fund on the fund house's website or mobile app, choose debit cards as their method of payment, and then complete their purchase. With more checks and balances, the procedure for paying for mutual funds with a debit card stays the same.

"This functionality is live with fund houses and distributors and customers can invest in lumpsum or start SIPs using their Visa debit cards.

If the investment is being set up for recurring payments like SIPs, the customer simply needs to enable recurring payments. In line with regulatory guidelines, the card details are validated by the aggregator and issuer against the account that is funding the investment, and that it indeed belongs to the investor. Cardholders will receive a pre-debit notification before the next payment is auto-debited from their accounts," Visa said.