Uber’s issues with RBI compliance in regards to payment collection has been in news for some time now. Although, a gray area, they were more or less flouting the RBI guidelines for payment collections from car rental customers.
Uber till a month back had only one payment option for Indian customers – payment through Credit card. Last month they added option of Paytm wallet payments to the relief of many. However, from today, Paytm will be the ONLY option available! They have done away with Credit cards to comply with Indian regulations.
If you open the Uber app today, this is what you will be welcomed with!
In a blog post – UBER IS NOW COMPLIANT BUT LESS CONVENIENT – Uber has explained the reason why they had to go Wallet-Only route.
According to Indian regulations every transaction made with an Indian credit card, no matter how small the amount, has to include two-factor authentication (2FA). While RBI has done this for security purposes, it is extremely difficult for companies like Uber to comply with it. In the view of this, they have now turned into wallet-only-payment channel!
In the post, Uber also goes to say that even though they introduced Paytm wallet option nearly a month back, they have seen very few people move from Credit card payments to Wallet based payment option. So, even though customers prefer credit card payments, they had moved to wallet payments to comply with RBI regulations.
Uber has also requested the Government for 45-day extension from the RBI that would give existing Uber customers sufficient time to transition over to a new 2FA-compliant wallet payment system. This will also ensure that consumers do not face any problem with transition also protects Uber drivers who rely on Uber’s riders as their sole source of income.
In our view, the mandatory requirement of 2 factor authentication is going to be a major issue not only for service providers and ecommerce sites, but also for consumers. As we have pointed out in our earlier post, Indians will now not be able to make purchases on most international ecommerce sites as they do not support 2FA.
While we do need security, the Government needs to make sure that security is seamless, and does not stop users from carrying out credit card transactions all together. We definitely need an alternative for 2 factor authentication. What do you think?