Mutual Fund Investments Can Now Be Made Using Visa Debit Cards
Industry-first partnership with Razorpay; goes live first with Federal Bank and ICICI Bank debit cards
Visa (NYSE: V), the global leader in digital payments, today introduced a pioneering 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 trillion 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.
By using their Visa debit card for investing in mutual funds, consumers can now set and modify their own 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.
"We are most excited to announce that Visa cardholders can now use their debit cards to invest in mutual funds. 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 fund SIP accounts1, 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, “We are thrilled to announce our partnership with Visa, introducing Debit Cards as an innovative payment method for Investments. This collaboration exemplifies our commitment to leveraging technology for seamless solutions. With Debit Cards, customers can conveniently initiate investments, significantly improving success rates for TPV-driven payment flows by 60-80%. We're proud to launch this innovation with Federal Bank and ICICI Bank, democratizing investment accessibility and setting new benchmarks, aligning with Visa's trusted industry leadership."
“We are very happy to be one of the forerunners in this new and ambitious project of using Debits Cards for investing into Mutual Funds in collaboration with Visa. Mutual funds offer diversification, liquidity and professional management making it a common choice for individuals looking to invest into 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 K G, Country Head – Retail Assets and Cards, Federal Bank.
Bijith Bhaskar, Head – Cards, Digital Payments & Consumer Finance, ICICI Bank, said “We are delighted to partner with Visa in this initiative. We have partnered with Visa and Razorpay to implement validation check to help mutual funds ensure that the source of funds belong 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.”
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. The process of mutual fund payments with a debit card remains 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.
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.