Uber in a strongly-worded blog post on Sunday announced that while it has implemented the two-factor authentication (2FA) payment method system as per Reserve Bank of India's mandatory regulations, the firm finds it to be "an antiquated solution that is cumbersome for consumers and stifling for businesses across India."
The taxi and ridesharing service has also asked RBI for a 45-days extension to transition to the new 2FA-compliant payment system (though not named, Uber is referring to its Paytm partnership implemented in November), so that both consumers and Uber's "partner-drivers" are not disadvantaged.
"Today [November 30], Uber has complied with the RBI August 22, 2014 circular requiring every credit card transaction made with an Indian credit card to include two-factor authentication. While we believe this requirement is unnecessary and burdensome, we have engaged in constructive discussions with the RBI and are committed to working with the Indian government to advance regulations that support innovation and job creation," noted company on its blog.
Uber further cites its observed "slow conversion of riders from credit cards to a 2FA compliant wallet" to indicate the consumers' "trust in Uber's payment system and a preference for more convenient yet secure online/mobile payments."
The two-factor authentication (2FA) system by RBI is meant to increase security during online transactions, and has been made mandatory for all credit card transactions in the country, but some companies like Uber were seen little reluctant to comply with RBI's directive. Notably, Uber's credit card payment implementation directly processes payments from the customer's stored credit card information without any further authentication.
The Reserve Bank of India issued a circular in August, reportedly after local taxi companies' complaints about Uber not following the guidelines. The circular had noted, "It is advised that entities adopting such practices leading to wilful non-adherence and violation of extant instructions should immediately put a stop to such arrangements."
In August, when NDTV Gadgets reached out to an Uber India representative, our queries were met by a firm 'No Comment.'
Following that however, in November, Uber tied up with digital wallet firm Paytm, saying the service was only available on its Android and iOS apps. Users will have to top up their Paytm wallet and the fare will be automatically deducted from the wallet. Users will also have to link their Paytm account to the Uber app or create a new Paytm account to continue using the cab service in India.
To make the transition attractive to users and ensure no attrition, Uber in November also began offering five free rides to consumers using the Paytm wallet, up to a maximum of Rs. 300 each. The offer lasted until November 30, and stretched across all its services in India (UberBlack, UberX, and UberGo).