Uber today announced that it has finally complied with the RBI August 22, 2014 circular requiring every credit card transaction made with an Indian credit card to include two-factor authentication.
The company has now stopped supporting the automatic payment through credit card option in the country, thus riders in India will now have to use a mobile wallet for payment rather than their credit card.
Uber was facing a tough time in the country from past few months, after the RBI declared that it is mandatory for companies to follow a two-step authentication process for credit card transactions. Last month, it had tied up with Paytm to offer the services of a semi-closed wallet. The wallet works through the mobile app and lets riders pay for their trips without using cash.
However, in a blogpost Uber has called this requirement an “antiquated solution that is cumbersome for consumers and stifling for businesses across India” as well as “unnecessary” and “burdensome.”
Here is what Uber said in its blogpost:
India’s regulations require every transaction made with an Indian credit card, no matter how small the amount, to include two-factor authentication (2FA). While this requirement is intended to provide more security for consumers, it is an antiquated solution that is cumbersome for consumers and stifling for businesses across India.
While we believe this requirement is unnecessary and burdensome, we have engaged in constructive discussions with the RBI and are committed to working with the Indian government to advance regulations that support innovation and job creation.
Prime Minister Modi’s government is dedicated to promoting a business friendly environment and we welcome his leadership and commitment to moving the nation forward. We are eager to take part in this important conversation and assist in creating Indian government policies that encourage economic growth, spur foreign direct investment and facilitate job creation in one of the fastest growing countries in the world.
Further, Uber has asked RBI for additional 45 days to finish switching customers over to a payment system that would give the majority of its existing riders sufficient time to transition over to a new 2FA-compliant payment system.
Uber on its behalf is very much active in urging its customers to switch to the new payment options via messages and emails and even via offering free rides.