83% of Indian consumers paying for apps on Google Playstore, Apple App Store and Windows Store support RBI to mandate OTP-based authentication for all app purchases and upgrades, a LocalCircles report said. Survey said.
RBI has stopped automatic recurring payments for all services offered by different companies like Amazon, Netflix or multiple applications or apps. This would mean that money cannot be directly debited from a customer’s credit card or bank account without his permission.
The new RBI rule, which came into effect from October 1, states that banks can process auto-debit transactions only if they send pre-debit information to customers at least 24 hours before payment.
See: New auto-debit rule changes explained
RBI has set a rule for banks to take pre-authorization from customers before deducting payments. From today, banks will not approve any standing instructions (e-mandate on cards for recurring transactions) placed on merchant websites/apps on credit/debit cards unless it is in accordance with RBI-compliant procedures . ET’s Saloni Shukla tells you all about this new rule of auto-debit. Watch
Several companies and start-ups have claimed that this has caused disruption as many customers are unable or unwilling to go through the monthly permission routine.
The survey said that many Indians said that they have had problems with the auto debit rule in the past.
46% of Indian consumers who have paid for apps on Google Playstore, Apple Appstore and Windows Store say that they have had an incorrect charge/overcharge problem in the last 12 months.
The survey included 40,000 responses from 302 districts in India.
The LocalCircle survey also pointed out that in most cases Indians bought apps from foreign entities.
“The next question in the survey seeks to understand from consumers whether the applications they use increase invoicing. In response, 48% said “don’t know”. Breaking down the survey, 33% said the applications they use are billed by a foreign entity. Only 19% of Indian consumers who paid for apps from Google Playstore, Apple Appstore and Windows Store said they were invoiced or billed by an Indian entity,” the survey said.