Leading merchants have approached India’s central bank, the Reserve Bank of India (RBI), one more time to request that banking institutions, payment aggregators (or payment service providers), and card networks (card associations) make certain that recurring payments (also known as automatic payments or recurring billing) are thoroughly tested to prevent disruptions, having lesser than a week left before the regulatory body’s tokenization mandate goes into effect.
Tokenization is the method by which a token or special code is used in place of the card information to carry out payments for online purchases without disclosing sensitive card information.
In a letter to the Reserve Bank of India (RBI) dated the 26th of September, the Merchant Payments’ Alliance of India (MPAI), which is a group of similar-minded merchants accepting digital payments in India, urged that system contributors be required to show the same degree of success rate in card and token-based payments without specifically requesting an extension. All current e-mandates that use credit card information must be converted to tokens immediately.
Several category 1 merchants are represented by the Merchant Payments Alliance of India (MPAI), composed of Microsoft Corporation, Netflix Inc, Disney + Hotstar, and Spotify.
Furthermore, the letter calls on the central bank to order banking institutions, card networks, payment service providers, and payment gateways to prove that Card on File Tokenization (CoFT) services function equally as efficiently in overall use cases of card-based payment processing. It also asks the RBI to make certain that current e-mandates on a card information basis are immediately transferred to tokens, and the recurring payment systems are scaled-out tested to prevent drop-offs at the time of renewals of mandate.
The merchants have also sought accessibility to test flows to guarantee clarity and incorporation at the merchant level. The sector association expressed uneasiness towards poorly tested alternatives that might be introduced after the 1st of October and cause one more wave of interruptions in card-based payments.