RBI Mandates Automatic E-Mandate Transfers, Easing Indian Subscription Churn
The Reserve Bank of India (RBI) has issued new rules for recurring digital payments, impacting services like OTT subscriptions. The guidelines mandate the automatic transfer of e-mandates to re-issued customer cards and prohibit banks from charging fees for the e-mandate facility. Additionally, payment notifications must include complaint filing details, and OTP requirements have been adjusted for various transaction amounts.
Key Takeaways
- Banks must now automatically transfer a customer's existing e-mandates to their new card upon re-issuance.
- Providing the e-mandate facility for recurring payments, such as OTT subscriptions, must now be free of any customer fees or charges from banks.
- OTP verification is no longer required for recurring monthly payments of up to ₹15,000, though it is still needed for payments exceeding that amount.
- Every automatic payment notification sent to customers is now required to include details on how to file a complaint.
Why It Matters
These rules directly address a primary cause of involuntary churn for subscription services in India: payment failures due to card re-issuance. By mandating automatic e-mandate transfers and eliminating bank fees, the RBI is lowering friction for both consumers and streaming providers. For services operating in the Indian market, this reduces the operational overhead and cost of re-acquiring customers lost to simple payment logistics. Watch involuntary churn metrics from services with a significant Indian subscriber base over the next two quarters to see the tangible impact of this policy.
Read full article at udaipurtimes.com