You are here: Home » Finance » News » Banks
Business Standard

Credit card transactions: Has RBI created an Uber-mess?

The RBI's new diktat could extend to companies such as Google and Apple, which sell content, apps and music using the same process

BS Bureau  |  Mumbai 

The Reserve Bank of India last week said that all credit card transactions would have to follow a two-step verification process. The ostensible target of this notification was the popular taxi-hailing service Uber, which allows consumers to locate available taxis in the vicinity through the internet and summon them. Users’ credit card data is stored with Uber which deducts the fare automatically at the end of the ride and passes on the payment to the cabbie, thus saving the passenger valuable transaction time.

The RBI has said that such transactions are a violation of its card-not-present transaction norms as well as of the Foreign Exchange Management Act. While the central bank’s directive was reportedly issued at the behest of Uber’s competition – radio taxi services – its ramifications could extend to such popular service providers as Google and Apple, both of which are based overseas use a similar process for paid content and music.

A blog by economists Suyash Rai and Ajay Shah points out that the Uber model could potentially save as much as 91 million man-hours of productivity that could go into GDP growth.

Should the RBI then adopt the model for all players or should it punish Uber and the likes in an effort to prevent possible fraud and to level the playing field for all service providers? To help make up your mind, here’s a selection of Business Standard’s top stories on the whole issue.

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Mon, August 25 2014. 11:52 IST
RECOMMENDED FOR YOU
.