Automatically collected payments or Merchant Initiated Transactions (MITs) are payments initiated by merchants (not by customers). The initial/fist transaction goes through SCA when the customer agrees to the T&Cs including the card to be debited automatically by the merchant directly. With MITs it is possible to collect recurring/subscription payments as well as unscheduled/invisible payments – charging customers based on how much they use your product or service such as ride-hailing apps.
In order to categorize a payment as a MIT:
- Merchant has a mandate from customer to initiate the payment (or a series of payments)
- Merchant collects the payments for goods or services directly on behalf of customer
- Merchant initiates the payment without any action from customer’s side