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How are other countries dealing with recurring card charges? Is there a reasoning why Indian regulations in this regard should be different from those in the US

How are other countries dealing with recurring card charges? Is there a reasoning why Indian regulations in this regard should be different from those in the USA, for example?

toomuchtodo 5y ago
The US is a very poor example in how to implement financial service regulations (a better example would be Europe, where they have instant payments and cram down interchange fees with regulation). Non-Indian software companies are accustom to business friendly recurring payment policies, not the more consumer-focused financial regulations India has. From OP's relevant article link [1]: > He adds that this directive caters to two problems. Discontinuing standing instruction to a merchant was a task earlier while some asked for a letter by post asking for the discontinuation. > Moreover, credit cards were mainly used for recurring payments while debit cards weren't as much in use. So, it would seem that the regulator is attempting to make it harder for businesses to lock customers into recurring payments they don't want, and to encourage debit card use versus credit card use. I imagine this is keeping in line with India not wanting capitalistic colonialism, which is why the Indian central bank kneecapped US payment networks [2] in support of their own instant payment system (UPI [3]). Developing countries don't want to pay unnecessary drag on their economic systems to rent seeking first world corporations, if they can avoid it. [1] https://economictimes.indiatimes.com/industry/banking/finance/banking/recurring-card-payments-to-be-affected-as-new-credit-debit-card-rules-kick-in-from-october-1/articleshow/86552869.cms https://economictimes.indiatimes.com/industry/banking/financ... [2] https://www.bbc.com/news/world-asia-india-57817618 https://www.bbc.com/news/world-asia-india-57817618 [3] https://en.wikipedia.org/wiki/Unified_Payments_Interface https://en.wikipedia.org/wiki/Unified_Payments_Interface
- billfruit 5y ago
  Preventing a consumer from subscribing something they want through an automated recurring payment may not be a consumer friendly thing as well. Perhaps the inability of the Indian framework to appropriately deal with fraud and other nefarious uses like misleading the consumer, etc is prompting such blanket measures. In other words, is potentially throwing the baby with the bathwater, a good policy?
  - toomuchtodo 5y ago
    As a regulator, you use the tools you have, not the tools you have to go begging for you may not get. Perfect is the enemy of good enough.
    - billfruit 5y ago
      It does feel like regulator is abdicating its responsibility "in detail" by such a measure, where as it could have acted to declare the norms under which recurrant payments could be done in a legitimate manner, and continue to actively monitor and oversee their enforcement. Regulator of course have to work with the tools they have, but here it looks more like they are preferring to take a shortcut.
  - axlee 5y ago
    If there is an alternative & sovereign way for recurring payments to still happen without paying an obscene rent on the whole economy to Americans who provide little to no value locally, I don't see the issue. Look up Autogiro in the nordics.
  - ssivark 5y ago
    The regulator has done precisely what you suggest — allow automatic recurring payments with a slightly stronger validation threshold and some conditions. The article is about certain entities along the payment processing chain dragging their feet on implementing the requisite updates. Many have complied (see Eg: comments about Stripe), and the switchover has been relatively seamless.
  - geodel 5y ago
    Perhaps. It is reasonable policy in the context. It is similar on other side also. Customers can't return stuff back in retail stores to get cash back in India. Funny story: A couple of years back a relative of mine visited US on office trip. Staying in a mid-level hotel they were surprised to know that they can just walk-in hotel's breakfast buffet, eat as much they want and even carry fruits, baked item etc while leaving. Back in India, hotel would do 2 level of ID/ security check before being ushered to buffet area and carrying any food item outside is prohibited. So customer and service provider both have high chance to be defrauded by party at other end of transaction.
alistairSH 5y ago
As far as I can tell, the US doesn't regulate this much at all. Certain newspapers are notorious for making it difficult to unsubscribe. IMO, merchants should be required to have an obvious unsubscribe button on your account page. Or perhaps all recurring payments managed through the consumer's bank, so a list can be provided for easy "bulk" management.

How are other countries dealing with recurring card charges? Is there a reasoning why Indian regulations in this regard should be different from those in the USA, for example?

toomuchtodo 5y ago

The US is a very poor example in how to implement financial service regulations (a better example would be Europe, where they have instant payments and cram down interchange fees with regulation). Non-Indian software companies are accustom to business friendly recurring payment policies, not the more consumer-focused financial regulations India has. From OP's relevant article link [1]: > He adds that this directive caters to two problems. Discontinuing standing instruction to a merchant was a task earlier while some asked for a letter by post asking for the discontinuation. > Moreover, credit cards were mainly used for recurring payments while debit cards weren't as much in use. So, it would seem that the regulator is attempting to make it harder for businesses to lock customers into recurring payments they don't want, and to encourage debit card use versus credit card use. I imagine this is keeping in line with India not wanting capitalistic colonialism, which is why the Indian central bank kneecapped US payment networks [2] in support of their own instant payment system (UPI [3]). Developing countries don't want to pay unnecessary drag on their economic systems to rent seeking first world corporations, if they can avoid it. [1] https://economictimes.indiatimes.com/industry/banking/finance/banking/recurring-card-payments-to-be-affected-as-new-credit-debit-card-rules-kick-in-from-october-1/articleshow/86552869.cms https://economictimes.indiatimes.com/industry/banking/financ... [2] https://www.bbc.com/news/world-asia-india-57817618 https://www.bbc.com/news/world-asia-india-57817618 [3] https://en.wikipedia.org/wiki/Unified_Payments_Interface https://en.wikipedia.org/wiki/Unified_Payments_Interface

billfruit 5y ago
Preventing a consumer from subscribing something they want through an automated recurring payment may not be a consumer friendly thing as well. Perhaps the inability of the Indian framework to appropriately deal with fraud and other nefarious uses like misleading the consumer, etc is prompting such blanket measures. In other words, is potentially throwing the baby with the bathwater, a good policy?
- toomuchtodo 5y ago
  As a regulator, you use the tools you have, not the tools you have to go begging for you may not get. Perfect is the enemy of good enough.
  - billfruit 5y ago
    It does feel like regulator is abdicating its responsibility "in detail" by such a measure, where as it could have acted to declare the norms under which recurrant payments could be done in a legitimate manner, and continue to actively monitor and oversee their enforcement. Regulator of course have to work with the tools they have, but here it looks more like they are preferring to take a shortcut.
- axlee 5y ago
  If there is an alternative & sovereign way for recurring payments to still happen without paying an obscene rent on the whole economy to Americans who provide little to no value locally, I don't see the issue. Look up Autogiro in the nordics.
- ssivark 5y ago
  The regulator has done precisely what you suggest — allow automatic recurring payments with a slightly stronger validation threshold and some conditions. The article is about certain entities along the payment processing chain dragging their feet on implementing the requisite updates. Many have complied (see Eg: comments about Stripe), and the switchover has been relatively seamless.
- geodel 5y ago
  Perhaps. It is reasonable policy in the context. It is similar on other side also. Customers can't return stuff back in retail stores to get cash back in India. Funny story: A couple of years back a relative of mine visited US on office trip. Staying in a mid-level hotel they were surprised to know that they can just walk-in hotel's breakfast buffet, eat as much they want and even carry fruits, baked item etc while leaving. Back in India, hotel would do 2 level of ID/ security check before being ushered to buffet area and carrying any food item outside is prohibited. So customer and service provider both have high chance to be defrauded by party at other end of transaction.

alistairSH 5y ago

As far as I can tell, the US doesn't regulate this much at all. Certain newspapers are notorious for making it difficult to unsubscribe. IMO, merchants should be required to have an obvious unsubscribe button on your account page. Or perhaps all recurring payments managed through the consumer's bank, so a list can be provided for easy "bulk" management.