Has the RBI Rule “Killed” Recurring Payments in India?



Earlier this month, the Reserve Bank of India (RBI) established a rule governing how businesses can process recurring payments.

In doing so, it “effectively killed all recurring payments” in the country, according to an op-ed published Sunday, Oct. 17 on Indian shopping website The Ken.

The bank’s decision requires customers with transactions up to 5,000 rupees (about $ 67) to undergo an additional authentication factor and a one-time registration. Transactions over Rs 5,000 require customers to authenticate each transaction monthly, 24 hours before transactions. For businesses and consumers, “it felt like an obstacle course,” wrote Praveen Gopal Krishnan of The Ken.

“In one move, the RBI effectively killed all recurring payments in India,” he wrote. “And it wasn’t done by an explicit ban, but by adding layers of consent on top of it, which added friction.”

Part profiles Mehul Mohan, 22-year-old CEO and co-founder of codedamn, which teaches programming to developers.

His company offers a subscription product to teach coding, and he said business has been affected by the new RBI rule, according to the report.

“We have lost about 60% of the active Indian subscriptions on codedamn,” Mohan told The Ken. “The cards just stopped working.”

First introduced in 2019, the directive was due to go into effect in April, but was delayed when banks said they were not ready to comply.

Read more: India’s new payments rules prompt big tech warnings

The RBI said the framework is designed to create “a measure of risk mitigation and customer facilitation.” Issuers handling such transactions must “send a pre-transaction notification to the customer, at least 24 hours prior to actual billing by SMS or email, depending on customer preferences.”

Earlier this month, several companies, including Google, PayPal and Sony, sent reminders to their customers and business partners about the directive. Apple wrote to developers to warn that “some transactions that do not meet these requirements will be refused by banks or card issuers.”



On: Forty-seven percent of U.S. consumers avoid digital-only banks due to data security concerns, despite considerable interest in these services. In Digital Banking: The Brewing Battle For Where We Will Bank, PYMNTS surveyed over 2,200 consumers to reveal how digital-only banks can boost privacy and security while providing convenient services to meet this unmet demand.


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