RBI directive on card payments in India
The directive issued by Reserve Bank of India (RBI) aims to enhance the security measures for processing e-mandates on recurring online transactions. Effective from October 1, 2021, this directive significantly impacts credit cards issued in India, as well as credit card recurring transactions made through PayPal and Apple Pay.
As a consequence of this regulatory change, there may be an increase in the decline rate for recurring online transactions originating in India. Our payment partners are actively engaged in developing solutions that align with the regulatory requirements outlined in the RBI directive. Since October 1, we have been closely monitoring the impact on recurring online transactions in India and are taking appropriate measures.
One-time transactions are not within the scope of the RBI directive and remain unaffected by this regulatory change.
FAQs
Why is Cleverbridge impacted by this change?
This country-specific regulation issued by Reserve Bank of India (RBI) is applicable to all merchants worldwide who process recurring billings, including Cleverbridge.
Which customers are affected by this change?
This change has a significant impact on customers using credit cards issued in India, as well as those using Apple Pay or PayPal billing agreements for payments.
Customers located or residing in India using credit cards issued outside of India for recurring transactions will not be affected by this change.
Which purchases are affected by this change?
This change primarily affects subscription renewals and initial orders for subscription products.
What impact can we expect?
The impact is challenging to predict accurately at this moment. Either processing payments for affected purchases may become impossible starting October 1st, or we may observe a higher decline rate for recurring online transactions. While a 100% impact is deemed highly improbable, it's more likely to observe an increase in the decline rate.
What status will affected orders have?
The order status for affected purchases varies based on the payment method:
- Subscription renewals and initial orders with credit cards result in the Payment Declined by Card Issuer status.
- Subscription renewals with PayPal Billing Agreement result in the Payment Declined by Card Issuer status.
- Initial orders with PayPal Billing Agreement result in the Awaiting Offline Payment status.
- Subscription renewals and initial orders with Apple Pay and Amazon Pay result in the Payment Declined by Card Issuer status.
What happens if the payment is declined?
In case of renewal, customers must re-enter their credit card details and undergo additional 3D secure authentication to complete their payment. Alternatively, they can choose a different payment option. Currently, international credit card brands are collaborating on a comprehensive solution to support the latest RBI requirements for successful credit card payment processing. We will promptly adapt our processes based on received updates.
What are our next steps?
Starting October 1st, Strong Customer Authentication (SCA) has been enabled for credit cards issued in India. We are closely monitoring incoming orders, maintaining ongoing communication with our payment acquirers for updates from card schemes, and promptly adapting our processes as needed.