India’s new credit, debit card rules may disrupt renewal of Netflix, Hotstar and Spotify subscriptions

To make credit and debit card payments via online merchants hasslefree and safer, the Reserve Bank of India has announced new norms which replace customer information with unique tokens. The system which comes after a 20% increase in card fraud will be implemented from October this year, but might interrupt recurring monthly deductions by international platforms. This is why Netflix, Spotify, Disney and Hotstar among others have urged the RBI to address the issue with such transactions via credit and debit cards, before the rules come into effect.

Might hit monthly payments

Although creating a token to be used for future payments on a site is a safer alternative to storing card numbers, names and CVV, many global platforms still require the details to renew monthly subscriptions automatically. According to an Economic Times report, RBI has also introduced tokenisation to address issues with canceling international subscriptions, which can even force people to cancel cards at times. But global service providers say that they aren’t sure that tokens will process recurring payments as swiftly as card information saved on the site.

The RBI has made it mandatory for domestic players to delete all card details and replace them with tokens by October 1, but international platforms are out of the regulator’s jurisdiction. The resulting disruption might mean that Indian customers may not be able to renew their Netflix, Hotstar and Spotify subscriptions if the issue isn’t resolved.

Compliance burden or minor tweak?

Among major names, Apple has already stopped accepting Indian card payments on its App Store due to the changes, and has replaced them with UPI payments and Apple wallet. Google on the other hand has already rolled out tokenisation to comply with RBI’s new mandate, considering its Indian user base.

The deadline to remove card data and move to tokens has been set for September 30, after the RBI gave three extensions in 18 months. But top global firms are saying that while their merchants are ready, they haven’t tested recurring token-based payments on their respective platforms.