Uber is in talks with Indian mobile payment firms in an attempt to become compliant with new digital payment regulations.
Several weeks ago the Reserve Bank of India resolved that online payments taking place between two Indian ‘residents’ cannot bypass two-factor authentication and that all transactions must be carried out in rupees and not dollars. Now, Uber has reached out to firms providing digital wallets and payment gateways in India in an attempt to become compliant with Indian norms.
The global taxi-hailing company stores credit card details of passengers and automatically charges the card once the taxi ride is over without two-factor authentication, using an international payment gateway.
Companies such as Uber now have until October 31 to become compliant, most likely integrating a mobile wallet into the app for Indian customers. According to a report in The Economic Times, Uber will most likely partner with payment gateway PayU, owned by South African internet giant Naspers. PuyU entered India in October 2011 and has captured a significant market share.
Uber launched its operations in India last year, and now operates in 10 cities in the country, making India its largest market outside the US. But this particular market, and the new regulations, will cause additional problems. While RBI allows users to store up to Rs 50,000 in semi-closed wallets, about 50 per cent of all telecom wallet users keep less than Rs 50 in their accounts, according to industry estimates. Slow internet service may also slow down the process.
Uber’s business model, built from a demand for hassle-free payment for cab journeys, is facing a challenge.
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