Visa, the global leader in digital payments, today introduced an initiative that enables consumers to invest in mutual funds using their Visa debit cards. Launched in partnership with Razorpay, the service is now available to customers of Federal Bank and ICICI Bank. With the Indian mutual fund industry’s average assets under management valued at Rs. 46.94 lakh crore for August 2023, a sixfold increase in 10 years, this innovative move will allow retail investors to enjoy the convenience, safety, and security of using their debit cards for mutual fund investments.
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“Starting with Federal Bank and ICICI Bank debit cards, this service will soon be available to more Visa cardholders in India. In a country with over 69 million mutual funds SIP accounts, 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.
By using their Visa debit card to invest in mutual funds, consumers can now set and modify their transaction limits. Also, customers can see all their SIPs linked to their debit card alongside other recurring payments by logging into their bank’s subscription management portals. In addition to an evolved dispute resolution mechanism offered by banks on Visa cards, the benefits program offered by banks for their card consumers makes it a rewarding alternative to current payment methods.
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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 per cent.”
On the website or app of the fund house, the customer can select a mutual fund and then choose debit cards as the payment option and proceed to checkout along the customer journey. Mutual fund payments with a debit card remain the same but with additional checks and balances. This functionality is live with leading fund houses and distributors, and customers can invest in lumpsum or start SIPs using their Visa debit cards.
“Mutual funds offer diversification, liquidity and professional management, making it a common choice for individuals looking to invest in the financial markets. We believe that this product will add value to our customers both in terms of security and convenience, thus ensuring greater confidence for them to Invest into Funds of their choice”, said Chitrabhanu KG, Country Head – Retail Assets and Cards, Federal Bank.
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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.
Bijith Bhaskar, Head of Cards, Digital Payments and Consumer Finance at ICICI Bank, said, “We have partnered with Visa and Razorpay to implement validation checks to help mutual funds ensure that the source of funds belongs to the investor, in line with the regulator guidelines. 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.”
