Amazon Prime Cancels Trials, Monthly Subscription In India To Meet RBI Recurring Payment Norms

After Google Play Store put an end to auto-renewals for app and game subscriptions earlier this month, Amazon has also tweaked its Amazon Prime subscription plans. The ecommerce giant will no longer offer monthly Prime membership in India, while free trials for Prime have also been halted.

With the changes, Amazon Prime is now only available in three-month or annual memberships. The monthly subscription plan was priced at INR 129 per month, but this has been discontinued to comply with new guidelines issued by the Reserve Bank of India on recurring payments and additional factor of authentication or AFA for such payments. Service providers have to implement AFA through one-time passwords to process recurring online transactions.

Amazon has updated its support page to reflect the changes in the membership plans for Amazon Prime subscription. Amazon’s three-month Amazon Prime subscription is priced at INR 329, while the yearly membership is priced at INR 999 per year. In India, Prime subscription includes priority delivery, Amazon Prime Video access as well as access to Amazon Prime Music.

As per reports last year, Amazon Prime has nearly 10 Mn subscribers in India, of which only 40% have directly bought their membership through Amazon Prime, while the rest have come through telco bundles and other promotions.

Google Play Store Halts Auto Renewals

Under the new rules, the RBI wants to incorporate an additional factor authentication (AFA) for recurring payments through payments card. Standing instructions (SI) registered on credit or debit cards for services such as Netflix, Amazon Prime, Disney+ Hotstar as well as a host of other online services such as billers and insurance providers, among other things will get deactivated as the new rules kick in.

The new rules for e-mandates come as part of widespread changes in digital payments, mandated in RBI’s new guidelines for payment aggregators (PAs) and payment gateways (PGs). The new guidelines disallow these payments players from storing customers’ card details with them in order to curb the increased instances of hacks and data leaks affecting customers.

Earlier, Google halted all auto renewing subscriptions on Google Play Store in India, including free trials and introductory pricing plans to comply with the RBI notification that was released on March 31 this year.

The central bank has mandated that no new subscribers should be onboarded for recurring subscriptions until an online platform is compliant with its new framework for such transactions. In response, Google told developers to suspend free trials and introductory pricing plans on their apps as these modes of transaction fall under recurring payments.

Further, banks will need to send out a notification to customers five days before a recurring payment is slated, and allow the debit to go through only after the customer agrees to the transaction. For auto-debit payments of over INR 5,000, banks will even need to send a one-time password (OTP) to the customer.

However, the Reserve Bank of India had extended the timeline for processing recurring online transactions from March 31, 2021 to September 30, 2021. This development came after several banks and payment gateways had sought additional time to comply with the directive on automatic recurring payments.