RBI new rule: OTT platform accounts will not be automatically renewed from October – Details inside
The Reserve Bank of India (RBI) had introduced a new rule in March this year regarding recurrent monthly payments on OTT platforms like Netflix, Amazon, Hotstar etc. However, the deadline for the implementation of the new rule was extended for six months that is till September 2021. Now, the rule will be implemented from October 2021.
The RBI had introduced this rule to curb hacking and internet banking theft cases. With the new rule, the automatic deduction of payment will stop and the monthly transactional process will take place through the use of Additional Factor of Authentication (AFA). This would encompass transactions made via debit cards, credit cards, Unified Payments Interface (UPI) or other prepaid payment instruments (PPIs).
In a statement regarding the move, RBI said, “The requirement of Additional Factor of Authentication (AFA) has made digital payments in India safe and secure. In the interest of customer convenience and safety in use of recurring online payments, the framework mandated use of AFA during registration and first transaction (with relaxation for subsequent transactions up to a limit of ₹2,000, since enhanced to ₹5,000), as well as pre-transaction notification, facility to withdraw the mandate, etc.”
It further said, “The primary objective of the framework was to protect customers from fraudulent transactions and enhance customer convenience.”
Once this rule is implemented, banks will have to inform the customers about the recurring payments at least 24 hours ahead of the debit to the card. The customers will receive this notification via SMS or email. The auto-debiting limit for a customer’s card will be set to Rs 5,000 and if you wish to make a transaction that goes beyond the limit then the customer will have to set a one-time password to verify it. Also, you can opt out of the recurring payment option whenever you want.