The taxi space in India has heated up phenomenally in the last 4 months.
– July 2014: Olacabs Raised $41mn
– August 2014: TaxiForSure Raised anywhere between $31-$50mn funding
– August 2014 : Uber India launched in 10 cities in total (within a year of India launch), making India its biggest market outside USA (in terms of number of cities).
RBI recently called Uber’s 1-click payment: “willful non-adherence and violation of extant instructions.”
“It is further advised that where cards issued by banks in India are used for making card not present payments towards purchase of goods and services provided within the country, the acquisition of such transactions has to be through a bank in India and the transaction should necessarily settle only in Indian currency, in adherence to extant instructions on security of card payments.”
Meru CEO, Siddhartha Pahwa shares his perspective on Uber India’s payment collection mechanism and why 1-click payment is clearly NOT a technology problem to solve, but is more regulatory in nature.
“International operators circumvented this 2FA even though RBI had made it amply clear that by merely having a payment gateway abroad does not allow anyone to do away with additional factor of authentication. In the process, they not only violated the RBI’s guidelines on 2FA but also violated the FEMA rules. Also they were exposing the passenger credit card to fraud risk. Even though we were completely ready a long time ago with mobile app that doesn’t require 2FA, we decided not to launch it. So this is not about technology – It is simply about following the laws of the land.” [source]
Why not look at wallets as a payment option?
The irony is that CNP (Card Not Present) works for serivces provided outside the country – which is what organizations like AWS, Apple and several SAAS players are doing. But for services provided inside the country, RBI mandates two factor authentication which is ridiculous.
For RBI, it’s time to revisit this regulation and enable efficient economies.
Recommended Read : Are Online Cab Aggregators Starting To Dent Offline Ones?