As the Reserve Bank of India’s (RBI) deadline to implement new rules which will be applicable to all types of auto-debit payments nears, video streaming services fear losing customers who might find the new process cumbersome. These platforms have time till September 30 to implement the rules.

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Over-the-top (OTT) platforms which rely on recurring payments to maintain subscribers will now need additional authentication under new rules of the RBI. For every payment exceeding Rs 5,000 using credit cards, debit cards, UPI and PPI including wallets, customers will have to provide a One-Time Password (OTP) to authenticate it.

These companies fear the new mandates would hurt customer experience and impact subscriptions. They fear that 10-15 percent of the subscriber base that directly subscribes to their platforms without any bundling packages might not renew their subscriptions.

The streaming platforms that could be affected by the new rules include Netflix, Disney+ Hotstar, ZEE5 and ALTBalaji.

“We’re anticipating a fall in subscription renewals and payments, and there is a lot of concern internally at all OTT platforms,” a senior executive with a streaming service told Hindustan Times.

Starting October 1, banks will be required to notify the customers five days in advance for recurring payments through third-party merchants, Moneycontrol reported. At the very least, they will have 24 hours before the payment is due to intimate customers about the scheduled payments and ask if customers want to continue payments or opt-out of the subscription.

The RBI has been pushing for additional protection layers for customers when they use third-party merchants for payments. The banking regulator said that the banks would be required to notify customers every single time a recurring payment is made so customers are fully aware of all the payments made through their bank accounts.

The RBI first issued a circular in August 2019 and the second one came in December 2020 to remind all the banks to comply with the new auto-debit rules.

(Edited by : Anshul)

First Published:Aug 31, 2021 1:10 PM IST