October 28, 2021

Excellent Pix

Unlimited Technology

India’s New Payment Rules Prompt Tech Warnings

Banks and Big Tech companies are warning their customers and partners in India to anticipate a wave of declined transactions as the country’s central bank issues new rules for processing recurring payments.

As TechCrunch reported Thursday (Oct. 7), the directive by the Reserve Bank of India is set to go into effect Friday.

It requires banks, payment gateways and financial institutions to seek additional approval on auto-renewables greater than 5,000 rupees, or $67, from users by carrying out notifications, e-mandates or Additional Factors of Authentication (AFA).

First introduced in 2019, the directive, which applies to transactions on credit card and debit cards, was scheduled to go into effect in April, but was delayed when banks said they were not ready to comply.

The Reserve Bank of India initially said the framework was created to provide a “a risk mitigant and customer facilitation measure.” Issuers processing such transactions are to “send a pre-transaction notification to the customer, at least 24 hours prior to the actual charge by SMS or email, as per the customer’s preferences.”

A number of companies, including Google, Sony and PayPal, have reminded their customers and business partners about the directive. Apple sent a memo to developers Wednesday cautioning that “some transactions that don’t meet these requirements will be declined by banks or card issuers.”

Read more: RBI Delays Plans To Launch New Payment Network

Earlier this year, the RBI announced it was delaying the launch of a new payment network due to safety concerns. If and when it’s compelled, the network would have allowed new entities to create digital payment platforms.

The delay was bad news for companies such as Amazon, Google and Facebook, which had sought new umbrella entities (NUEs) licenses under the plan in conjunction with companies like Reliance Industries and ICICI Bank.

——————————

NEW PYMNTS DATA: DIGITAL BANKING STUDY – THE BREWING BATTLE FOR WHERE WE WILL BANK

About: Forty-seven percent of U.S. consumers are shying away from digital-only banks due to data security worries, despite significant 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 shore up privacy and security while offering convenient services to satisfy this unmet demand.

Source News