Thread by @shashank_kr

Starting today, @RBI new set of guidelines will become applicable for recurring payments via cards.
As the industry moves to the new standard, here is my take the new rules 1/n

Till date, rules on recurring payments via cards were not clear. Recurring payments worked on credit cards but not on debit cards. There are 900 million debit cards that are now eligible for supporting recurring payments under the new guidelines. 2/n

This is a massive change and along with the UPI Autopay, it will open the floodgates for recurring payments and subscription economy in India. 3/n

There is a strong emphasis on the need for secure #digitalpayments in India & to enable consumers to place their trust in the #digitaleconomy. Now, all banks are going to provide a dashboard to consumers to check the mandates they have registered with merchants instantly 4/n

Initial teething issues are a given & it is critical for the banking ecosystem and #fintech companies to work with together to continue providing seamless services to the customers. 5/n

Many portals like media platforms, ad platforms, etc. will face disruption of payments as they look to migrate to the new way of handling recurring payments. Most banks have sent notifications to this effect to their customers. 6/n

There will be a short term pain of 3-6 months when banks take time to integrate with @Razorpay's MandateHQ to launch support for recurring payments for their consumers.Some banks have gone live while others will take few months to cross the finish line.7/n
razorpay.com/newsroom/razor…

But long term, unlike most developed countries, in India consumers will be able to cancel autodebit mandates at the click of a button from a single place.
8/n

Where the rules fall short is the upper cap on payments of Rs 5000. It's a low amount for any customer looking to do large purchase. Eg lakhs of spend monthly on ads, cloud, SaaS tools, etc. for B2B purchases. 9/n

These customers are going to see multiples of Rs 5k debits on their card statement and it's bound to cause ample confusion. 10/n

However, with proper regulatory support for recurring payments for the first time, we are going to see many businesses taking advantage of the new rules and launch subscription first products. Monthly active subscribers will be the metric to keep track of in this new world. 11/n

The @Razorpay Subscription razorpay.com/subscriptions/ product which has been ahead of it's time when launched in 2017 has helped 1000s of businesses navigate recurring payments in the past amid this changing payments landscape.
12/n

In short, the new @RBI rules are beneficial for the consumers and businesses but will cause disruption short-term. It's a great step forward in helping bring India to an era of a digital-first economy, driven by safer payments, increased convenience & a seamless experience. 13/n