RBI Directive on Card Payments in India

The Reserve Bank of India (RBI) issued a directive that strengthens the safety and security measures applied to processing e-mandates on recurring online transactions. The RBI directive takes effect on October 1, 2021 and has an impact on credit cards issued in India, as well as PayPal and Apple Pay credit card recurring transactions.

This regulatory change might result in a higher decline rate for recurring online transactions issued in India. Currently, our payment Exchange of money for goods and services in an acceptable amount to the customer where the payment amount has been agreed upon in advance. The customer can only pay with an accepted payment method. Each payment has an individual payment cost. partners are working on implementing compatible solutions with the regulatory requirements of the RBI directive. Starting October 1, we have been closely monitoring the impact on recurring online transactions in India and acting accordingly.

One-time transactions remain out of scope of the RBI directive and are not affected by the regulation change.

FAQs

Why is Cleverbridge impacted by this change?

This is a country-specific regulation introduced by the Reserve Bank of India (RBI) and therefore applicable to all merchants that process recurring billings globally.

Which customers are affected by this change?

This change affects all customers using a credit card issued in India as well as Apple Pay or PayPal Billing Agreements to execute payments.

Which purchases are affected by this change?

This change has an impact on subscription renewals, as well as initial orders for subscription products.

What impact can we expect?

At the moment, the impact is difficult to predict. Either processing payments for affected purchases will not be possible starting October 1st, or we will observe a higher decline rate for recurring online transactions. Currently, we assume a 100% impact is highly unprobable. It is more likely that the decline rate will increase.

What status will affected orders have?

The order An agreement between a seller and a buyer to exchange goods and/or services for money. An order can: - contain multiple products and quantities; - have multiple financial transactions. A preorder authorization is considered an order. status for the affected purchases will be as follows:

• Subscription renewals and initial orders of subscriptions paid for with credit cards will result in Payment Declined by Card Issuer.
• Subscription renewals paid for with PayPal Billing Agreement will result in Payment Declined by Card Issuer. Initial orders of subscriptions paid for with PayPal Billing Agreement will result in Awaiting Offline Payment Offline payment stands for a group of payment options that do not involve online transactions like direct debit, wire transfers, and checks. With the order confirmation, the customer receives a link with information on how to make the payment. Ordered products are delivered as soon as Cleverbridge receives payment confirmation from the payment provider..
• Subscription renewals and initial orders of subscriptions paid for with Apple Pay and Amazon Pay will result in Payment Declined by Card Issuer.

What happens if the payment is declined?

In the event of renewal, customers need to re-enter their credit card details and provide an additional 3D Secure Authentication to complete their payment. Alternatively they can select a non-subscription relevant payment option Set of payment choices displayed to the customer on the checkout page. Available payment options are based on the customer's GeoIP location and include different payment methods and types, for example: a Purchase order (PO) is a payment option we offer our B2B customers. POs are usually paid via the payment method of wire transfer..

Currently, the international credit card brands are working on an overall solution, supporting the latest RBI requirements to process credit card payment successfully. As soon we receive further updates, we will adapt the corresponding processes.

What are our next steps?

Starting October 1, Strong Customer Authentication (SCA) is enabled for credit cards issued in India. We have been closely monitoring incoming orders and continuing to engage with our payment acquirers on any updates from the card schemes and adapting them if necessary.