
Ask HN: What is wrong with Reserve Bank of India? - superasn
This is a bit of rant but I&#x27;m also wondering if there is anything we (the Indian tech community) can do about it?<p>If you&#x27;re an Indian startup, I&#x27;m sure you must know that the Reserve Bank of India has the worst policies when it comes to charging a credit card.<p>1) In India, you <i>cannot</i> create recurring subscriptions as the RBI prohibits charging the credit card automatically. Not one Indian payment processor (I&#x27;ve talked to a many) gives you the option to create recurring subscriptions. Can you imagine where half the SaaS startups will be without recurring credit card subscriptions?<p>2) Add to that, Paypal to Paypal transfer within India is prohibited by RBI. Why? Because certain people used to evade tax by purchasing goods directly with their Paypal balance. So, instead of catching the tax evaders the RBI found it easier to ban the whole thing. They could have made it mandatory for Paypal to report every transaction (as they require a a PAN card) but banning it altogether was easier, I guess?<p>3) Even big companies like Uber had to recently discontinue Credit card purchases because of these inane credit card policies of RBI [1]<p>4) I really don&#x27;t think it&#x27;s about customer security (since the rest of the world seems fine with it) but rather some &quot;Babu&quot; type mentality which is to ban the whole thing rather than make the efforts to make it work securely.<p>Anyway, enough about the problem. Now what can we do about it?<p>I know Modi really wants us to &quot;make in India&quot; and wants to promote the IT industry. Who are the right people to contact who can do something about this?<p>[1] http:&#x2F;&#x2F;qz.com&#x2F;296483&#x2F;indias-credit-card-rules-just-took-the-ease-out-of-uber&#x2F;
======
programmer_dude
>In India, you cannot create recurring subscriptions as the RBI prohibits
charging the credit card automatically.

I am really happy that this is how it is. There is no shortage of cheats and
frauds in India. Thanks to the RBI I can rest easy without worrying about
getting (unsanctioned) charges on my credit card from shady businesses.

The RBI does provide an alternate means for supporting recurring bills. If you
are a business in India try looking into the ECS option:
[http://www.rbi.org.in/scripts/ECSUser.aspx](http://www.rbi.org.in/scripts/ECSUser.aspx)

~~~
superasn
Maybe you're skeptical but if everyone thought like this, here is a small list
of things I wouldn't be able to do which I'm really thankful for:

1) AWS bills me automatically every month for the hosting. I'm totally fine
with it and kinda happy they do it.

2) Namecheap renews my domains for me (the ones I've setup on auto-renew). I'm
happy they do it because I'm traveling a lot.

3) Paying for services like Uber with my credit card sounds nice. The process
seemed really effortless.

4) I'm sure I can think many more things where this is a convenience for the
customer.

> Thanks to the RBI I can rest easy without worrying about getting
> (unsanctioned) charges on my credit card from shady businesses.

There are cheats and there is a system for dealing with cheats. It's the same
everywhere (419 scammers are not from India). You don't unplug from the
internet on Windows just because there are a tonne of viruses for Windows. You
install an anti-virus or firewall for that.

> If you are a business in India try looking into the ECS option:

I know about the ECS option but that really doesn't work very well with online
business. As far as I know you need a Void check from the customer and there
is paperwork (AFAIK). Also what about international customers, just because
you're based here does not stop you from having those.

~~~
thisisit
ECS doesn't require a void check. The electricity bill which you might be
paying via your credit card on a monthly basis is an ECS payment.

The only problem here is as a business you cannot set it up for a customer,
like the AWS bill because "ECS Credit can be used to pay interest,
dividends...." (pay; not charge)

Customer needs to add and set it up on his own, so thats a bummer for sure.

------
arihant
I don't see how unsecured CC is good for us. Credit card fraud raises national
debt, makes your economy reliant on derivatives such as insurance and in the
end you fall down. Maybe US economy could sustain derivative based approach
because of it's size, but India would be in much worse position if something
like 2008 happened here.

Now, that said, this could be an opportinity for a startup, so stop
complaining for a moment. Americans did not have easy way to pay, what did
they do? They created PayPal. Indians don't have easy way to accept recurring
payments, what should we do? Create an alternative to CC using ECS. We do have
ECS, remember? It's a great system and roadside lenders are using it, so it's
not hard to setup. It's just not a simple API yet. So get it there.

You know, somebody must have ported CC online too. Wasn't the same since Adam.
Somebody needs to do that with ECS and then we would have a system that is
orders of magnitude more secure that recurring CC, requires almost no
insurance, and puts the guy paying directly in control.

Don't start off assuming that CC is a very bright idea, in general. With all
that said, I do believe RBI is working on a simplified banking API guidelines.

Also SaaS has nothing to do with recurring CC. Don't you use postpaid services
in India? Generate an invoice and give someone a week to pay. I mean if it's
good enough for other service providers, why not for SaaS? Just use a shorter
payment deadline.

~~~
driverdan
> Credit card fraud raises national debt, makes your economy reliant on
> derivatives such as insurance and in the end you fall down.

That's not how credit cards work. Credit card fraud is never shouldered by the
country, only the banks and stores that fall victim to it. There's no
insurance involved, it's a cost of accepting credit cards.

> Also SaaS has nothing to do with recurring CC. Don't you use postpaid
> services in India? Generate an invoice and give someone a week to pay. I
> mean if it's good enough for other service providers, why not for SaaS? Just
> use a shorter payment deadline.

A big factor of having a successful SaaS product is reducing friction and
making it scale. Invoicing for an inexpensive reoccurring service does not
scale and is a pain for both sides of the transaction.

~~~
kazinator
> _Credit card fraud is never shouldered by the country, only the banks and
> stores that fall victim to it._

That's a little near-sighted, I'm afraid. You don't think banks have a way to
sock their debt to countries?

Heck, individuals do. On my income tax form here, there is a write-off field
where I can put in losses from investments and such.

~~~
chernevik
Only as nets against investment gains.

------
kazinator
Kudos to RBI for not supporting pre-authorized credit-card transactions. These
are a stupid idea.

Consumers, never sign up for that crap, even if there are incentives.

If you are charged some extra fee, you will not be able to get it back,
because you authorized the contract.

I almost got charged a superfluous $600 fee this way. Only, the foolhardy
merchant sent me advance notice that this charge is coming to my credit card.
So, of course, I promptly called my bank's security center and canceled the
entire card. That's what it took to avoid the charge, which bounced, and the
dickheads have been trying to collect that $600 from me ever since.

> _Can you imagine where half the SaaS startups will be without recurring
> credit card subscriptions?_

Yes, I can. They will have to send people bills by e-mail (or perhaps even
snail mail) and await payment, like any other honest business. Then suspend
the account if it is in arrears for more than X days.

Doh?

> _but rather some "Babu" type mentality which is to ban the whole thing _

Maybe Babu Banker smartly doesn't want his customer support people to deal
with all the ensuing complaints, arising from a flood of people begging to
have unwanted charges reversed.

~~~
lucaspiller
> They will have to send people bills by e-mail (or perhaps even snail mail)
> and await payment, like any other honest business. Then suspend the account
> if it is in arrears for more than X days.

How do services like Netflix and Spotify work in India? In the UK I pay
Netflix £6.99 a month (about the price of two coffees), and I'd get rather
annoyed if I had to send them a cheque for that amount every month :D

~~~
programmer_dude
There's no need for checks or credit cards India has internet banking (100%
online payments).

~~~
BronSteeDiam
Netflix and Spotify don't do business in India...

------
pajju
This is a good topic to Discuss in length.

As someone pointed out, the future is headed towards Closed Wallets - Paytm or
Apple Pay.

In India, most of them don't understand security. Online banking is nascent,
still not reached critical mass.

Many transactions happen via Cash on Delivery here in India. I run Jumkey.com
- a Jewellery Marketplace, more than 70% of orders are on COD.

I feel, RBI has made enough good choices and protecting customers first.
Banking Rules should be Strict.

Paypal was promoting easy money movements without trace being left. So, How
RBI reacted makes sense in that context.

Coming to Innovation, 2015 is all About Mobile and Mobile Wallets. Will only
get better overtime.

~~~
rounak
don't think Apple Pay is a "wallet", in that you can't store money, it's just
your CC that's being charged.

~~~
ryanhuff
True, although many Apple Pay users have Visa/MC debit cards linked to a
checking account, essentially making it a digital wallet.

------
chdir
'liability' & 'credit history' may or may not be the reason but it's a good
justification.

In India, is it easy (or even possible) to deny an unauthorized charge on your
credit card? AFAIK, this is possible only after you declare your credit card
last or stolen. Any charges before that would be the customer's
responsibility.

Before the above is implemented, it is important to have 'zero liability'
credit cards (RBI is working on it [1]). The 'zero liability' requirement
would also need a reliable credit history of consumers. Not sure if that
exists in India yet.

[1] [http://trak.in/tags/business/2012/01/10/rbi-hints-at-zero-
li...](http://trak.in/tags/business/2012/01/10/rbi-hints-at-zero-liability-
for-indian-credit-card-customers/)

------
cinbun8
> Can you imagine where half the SaaS startups will be without recurring
> credit card subscriptions?

In Singapore or the United States. This is the route they take to avoid this
problem.

> I really don't think it's about customer security

It is. Even with the security involved you frequently see people responding to
the `You won a lottery from Coca Cola` and getting defrauded.

> Who are the right people to contact who can do something about this?

You're asking for a framework that would benefit SaaS startups. Fair enough.
This will take time. Recurring billing is important, but what about contracts
? Did you know that you need a signed document for each customer that a SaaS
company engages with in India ? It needs to be signed physically. Credit card
charges are only the first step. From a broader perspective starting a company
from here is still hell.

You either use a 3rd party provider that can set up recurring billing and move
the money into an Indian bank account (like 2CO) or move the base of
operations to Singapore / US so you can set that up. India is not startup
friendly and this will be the case for some time to come. There is very little
incentive to make things easier for the little fish.

------
BIackSwan
Agreed on all points.

This problem has led to the proliferation of wallets. PayTM, ICICI Pocket and
other virtual wallets are gaining ground super fast coz of their ease to do
transfers. The whole market is heading in that direction purely because of
RBI's short sighted policies.

I have a feeling that when a scandal/scam occurs on this type of a system. The
ban hammer comes down on them too.

------
testbeta
Tell me about it!

It's not just the RBI, every nook and cranny of Indian politics and
bureaucracy is laden with such mentality, the only thing they know is strangle
the bottlenecks, it is ridiculous!

I can't pay Aliexpress because they don't go along with paypal so well, for
whatever reason, credit card transactions are declined everytime, because of
the RBI's strangling policies, and this is with the leading national bank,
can't pay via western union because for some reason you can send money to
India but not from India, There is huge fee for bank to bank wire transfer,
and no other way via post or any other. Such are the sad affairs of finance
management in India.

And about other departments plagued too, I went to get petrol for my vehicle,
which I couldn't drive to the station for it was that dry, on another vehicle
to get some in a can. They outrightly refused to give oil in can because
someone above passed an order restricting sale of oil in cans or bottles, the
order seemed to be aimed at petrol used in protests, petrol bombs, and
vandalism. I tried 2-3 stations but in vain.

India is emerging as a censoring and surveillance state fast, and the way it
curtails things it soon might surpass US, Russia, China. Just wait and watch!

~~~
icebraining
You can't just buy gas in a can here in Portugal either, and the same is true
in other European countries and in Brazil. You need to have a certified
recipient, due to safety concerns related to spills and gases that might leak.

What's annoying is that stations often don't sell them, so you need to carry
one in your car.

~~~
testbeta
Spills and gases are not even close to being on their agenda here, they just
want to curb vandalism by denying them easy access to gas, for someone who
really wants petrol for purposes other than as fuel in vehicles, it isn't that
difficult to siphon some out of gas tanks of vehicles. That's how I did it,
otherwise I wouldn't ever get to drive that vehicle again. How do you keep a
can in car, if they don't sell it in cans, how do get oil in cans?

------
twilightfog
> Not one Indian payment processor (I've talked to a many) gives you the
> option to create recurring subscriptions.

Not true, Paypal allows you to create recurring subscriptions in India, I
already have two subscriptions which PayPal charges to my CC every month
_automatically_. So, I'm questioning the premise of this post, PayPal
certainly follows RBI regulations now, and if other payment processors are not
doing it, it must be a business decision on their part, and maybe they will do
it going forward. Can you provide any references of RBI policies prohibiting
recurring subscriptions ?

~~~
zodvik
Is the merchant established in India?

~~~
twilightfog
After a search, I see that companies need to obtain the necessary clearances
from RBI (Indian or international) to charge recurring payments on credit
cards. These are only granted to businesses with established track records.
So, yes, a SaaS startup might not qualify for it. But as a consumer, I'm
actually happy with this RBI policy.

~~~
zodvik
The problem with that -> there is no well defined criteria for what
"established track records".

~~~
orbifold
I'm guessing it is companies that have enough money and influence to get the
right government officials to "listen" to them.

------
brighton36
Bitcoin will solve most of these problems over time. Recurring payments isn't
in yet, but other than that the tech is pretty close to where you need it to
be. Probably theres a lot of room for a startup to come and offer value
transfer solutions for indian citizens from outside the RBIs jurisdiction.

~~~
zackmorris
What I find compelling about cryptocurrencies is the inversion of trust. So
for example we think of interactions with RBI or PayPal as necessary because
we are trying to go from ledgers to rupees or dollars (because nobody accepts
IOUs as payment).

But if cryptocurrencies take off the way they are probably destined to, then
they may reach a higher level of trust than hard currency in some countries.
We'll be trying to find ways to go from rupees or dollars to Bitcoins once
Bitcoins are accepted everywhere.

I'm thinking the endgame for all of this is that banks will move more and more
towards the investment side because it's so easy to make money on volatility
(unless governments decide to crack down on making money simply for having
money ..unlikely, although capital gains taxes will almost certainly go up to
match normal income tax). The traditional "boring" banking that's used for
things like mortgages and money transfers is going to have a tough time. That
is, until we consider that dollars are backed by the power of their countries
and Bitcoins aren't backed by anything, so people will probably rather hold
their savings in banks with FDIC insurance rather than strings of random
numbers.

After writing all of this out, I think what's going to happen is that capital
gains taxes will give way to tariffs that are charged any time
cryptocurrencies are converted to hard currency. So people will be free of
hand holding until they go to buy a large asset like a car or home that the
government can require hard currency for.

We'll probably need a progressive tax on cryptocurrency exchange or else we'll
see wealth inequality magnified even higher than it is today. Another option
would be to get rid of income tax and switch to a wealth-based accounting
where people report the sum total of gains and losses for the year across all
currencies and get taxed for increased wealth (or credited for a decrease).

On that note, the progressive tax could be applied each transaction by a
factor proportional to each party's wealth rather than the amount of currency
exchanged, so that taxes/credits could be applied continuously rather than on
a yearly basis. So no more having to do your taxes, but bankers might switch
to a style of accounting more like the IRS.

------
ziikutv
I do agree that this is some what of "babu" type mentality but there have to
be fundamental changes in the structure/process of computer usage in India.
For example, the security measures that can be taken by RBI can easily be
worked around as most people go to CyberCafe's to use computers. Not many
people own computers. The people running the said CyberCafe's have little to
no awareness of what is going on in there. It's not very hard to bypass the
anti-virus to insert keyloggers.

To make matters worse, some people simply go to the cybercafe owner and have
him fill out all the forms and information as they do not know English. I have
also seen one couple giving their CC information to the owner and the owner
purchased something via Flipkart.

------
anupshinde
Look into the details, it is perfectly reasonable to protect the customer. I
started complaining myself when I found it was so difficult here.

I see RBI Governor is competitive and responsible enough (and better than many
other developed-country's central-bank governors)

As far as Uber's case goes - they used a work-around to bypass the
restriction. It is unethical and illegal to do so. Many other Indian startups
are also trying to do the same - and they must stop working around RBI rules.

------
sergiotapia
Regarding recurring payments: this is a good thing in the eyes of the
consumer. I want to pay for 1 month of something and only one month - and I
find it pretty scummy that most companies don't allow for that. For example,
Netflix, CodeSchool, etc.

Sure I can 'subscribe' for one month and then cancel, but why should I have to
go through that step? What if I forget and three months down the line I
remember that I had to manually cancel my sub?

------
shk
While I am not trying to defend the RBI, I will try and give the reasoning
from RBI's perspective. Note that I don't personally support these bans.

1) Banks in India do not provide easy ways to do chargebacks. Also, many
people are not even aware that you can do chargebacks. I have to manually call
a bank and ask them to do so after going through a couple customer service
representatives. Also, consider that a big chunk of the population is coming
in the ambit of financial institutions for the first time. Many people are
opening their bank accounts for the first time. Many people in India still do
not trust the banks. If they see a couple hundred bucks vanishing from their
accounts, they might as well abandon putting money into the accounts.
Incidents like Target or Home Depot if happen in India will rock the trust
that people have in these institutions.

Banking in India is a business activity synonymous with trust [1]. And in my
opinion RBI has done a fine job of it.

2) RBI banned Paypal earlier because it concluded it's not complying with
regulatory framework of the country. These regulations are in place for a
reason. If they are obsolete then we should campaign for them to be eased. But
you don't get a free pass just because you are a big entity.

Paypal as they were operating earlier had to be regulated as a bank and PayPal
does not want that to happen. Any entity which provides on-demand payments
back then had to be regulated as a bank as per RBI rules. PayPal was basically
circumnavigating this regulation so that they don’t have to answer questions
to the government about how they conduct business. Also, getting a banking
license requires a lot of regulatory oversight. The closed wallets regulations
that RBI came out with later was a in my opinion direct response to this.

3) Uber was routing Indian card transactions internationally. They were in
essence exploiting a loophole in the regulations. If RBI hadn't blocked Uber,
then Olacabs, Flipkart, etc. will also have done the same. This will have
directly undermined the 2FA policies RBI has put in place. Forcing Uber to
comply with the policies was the right choice at that moment.

4) The proliferation of closed wallets has forced RBI to consider whether
removing 2FA on small value transactions will be beneficial.

You should understand that India's economy has only been opened recently. A
lot of the restrictions will go away with time. If you think they are harmful
then convince the RBI of the same. But these restrictions cannot be removed
overnight just because a new startup feels the need for the same. RBI's each
decision will have far reaching impacts on the financial systems of the
country and they need to be taken with utmost care and foresight.

[1]
[http://www.rbi.org.in/scripts/BS_SpeechesView.aspx?Id=587](http://www.rbi.org.in/scripts/BS_SpeechesView.aspx?Id=587)

Edit: Added more context for Paypal

~~~
radmuzom
Great comment. I am not sure why you personally don't support these bans. Of
course, they need to be gradually lifted as and when business becomes more
mature in this country; however, for reasons you have best illustrated, they
should stay and be lifted on a case to case basis, also based on demonstrably
good behaviour from the companies. There is absolutely no evidence to support
that consumer protections leads to bad business outcomes - in fact, companies
innovate to provide good service while complying with regulations (e.g. cash
on delivery).

~~~
shk
I feel long term I can't support the policies but short term they are
absolutely fine.

------
ZeroCoin
>Can you imagine where half the SaaS startups will be without recurring credit
card subscriptions?

I have done quite well opting not to use recurring credit card subscriptions
for my SaaS, imho.

If you make a good product, customers will come back to use it again and
again. They won't just forget about a product that worked wonders for them.

If you can't succeed without recurring billing then your product probably
isn't good enough to succeed anyways.

~~~
remarkEon
> If you make a good product, customers will come back to use it again and
> again. They won't just forget about a product that worked wonders for them.

Ehhh I can turn that around. If you make a good product, customers will have
enough confidence in that product to not want to consciously have to make a
payment on a recurring basis. I'd suggest it's not something necessary for
your product to succeed, but it's something your customers will probably want.

------
sandGorgon
There's a lot of things that the RBI is doing that the US will do shortly. For
example the Chip-n-Pin implementation in India (and Europe) will soon be
adopted in the US By Oct 2015.

We have an additional liability requirement (I wont call it safety, since what
it essentially does is pass on liability) of Two-Factor auth for _online
payments_ as well - which means that most Indian credit cards work only with
some difficulty on international ecommerce sites.

That said, the RBI has been progressive in P2P payments - for example a lot of
people do not know about IMPS (Immediate Payment Service) which takes place
over phone SMS to transfer money instantly ... without needing a smartphone.

I think the RBI is fairly intelligent in understanding payments, and is trying
to learn from the mistakes made elsewhere.

I feel this pain particularly accurately since my startup (shameless plug:
RedCarpetUp.com) is trying to disrupt offline payments and trying to build an
"Uber-like" wallet for hyperlocal retail. We have had to overcome serious
regulatory challenges, but still have some way to go.

------
octatoan
You need to provide some context for non-Indians. Not everyone knows what a
PAN card is.

~~~
kranner
For anyone who doesn't know,
[http://en.wikipedia.org/wiki/Permanent_account_number](http://en.wikipedia.org/wiki/Permanent_account_number)

A tax ID (and physical card) issued to individuals and other tax-paying
entities. The PAN must be quoted in all high-value cash transactions and money
transfer mechanisms (such as PayPal).

By the way, for Indian taxpayers the advance tax deadline for this quarter is
today :)

~~~
pedrosorio
Thanks for clarifying. At first I thought it was referring to the Personal
Account Number in:
[http://en.wikipedia.org/wiki/ISO/IEC_7813](http://en.wikipedia.org/wiki/ISO/IEC_7813)

------
ianstallings
Opportunity just presented itself. But it's dressed up as work.

I mean that seriously, someone can get paid very well streamlining recurring
payments in India obviously. But it's going to be hard, like all things worth
doing.

------
imaginenore
I'm surprised credit card companies still don't have some simple UI to
enable/disable recurring transactions per business. Make it an opt-in, and
most of the related fraud problems will go away.

------
anuragsrathor
I, on the other hand would say that things are better than before. And
moreover, the no of credit card frauds is one of the lowest as compared to
other countries.

It would be a bit more naive to say that RBI's policies are the worst, because
these are the same policies which were much appreciated by the financial world
during the 2008/2009 financial meltdown.

Yes, the policies are a lot difficult and sometimes does not makes sense. But
it has been designed and implemented to be one of the robust financial systems
in the world.

------
balladeer
> Because certain people used to evade tax by purchasing goods directly with
> their Paypal balance. So, instead of catching the tax evaders the RBI found
> it easier to ban the whole thing.

PayPal wasn't helping in catching certain people either - or wasn't willing to
come under the ambit of Indian banking/taxation rules. Besides how do you
think one can "catch" certain people without actually enforcing some rules
that companies agree to follow?

You can work around it by asking a card processor to generate a bill every
month and send it to the customer for an online payment - that's how ISPs do
it. I am sure you know this.

> Even big companies like Uber had to recently discontinue Credit card
> purchases because of these inane credit card policies of RBI

Really?

Flipkart does it, Amazon does it, Ola does it. Every damn company out there
can do it but somehow Uber was/is unable to do it, right? Why? Because they
didn't want to implement or go through the extra level of security added to
every credit card transaction (either online - iPin or OTP, or off-line -
PIN). That's one of the best security features RBI has introduced and I
believe every country should have such additional plastic money security
layers.

> I really don't think it's about customer security (since the rest of the
> world seems fine with it)

No, rest of the world isn't fine with it. And even if they are (let's assume
for argument's sake) doesn't mean India should be too. Especially since seeing
the minimal level of surveillance (it's a different devil altogether),
policing, awareness and infrastructure to support these measure India has. So?
India should let the fraud, thefts carry on till it catches up in
infrastructure? I don't think so.

> Now what can we do about it?

First, imho, stop thinking on the lines that - these changes were made just to
antagonize you "Startup people" and were not actually meant for consumer
security, because they were and I as a, consumer, feel safe as hell having the
ability to clear transactions with a PIN that only I know and a criminal can't
do shit even if he/she has my credit card number, Exp date, and even CVV # -
ridiculously all that is required to clear a transaction in many countries in
of "rest of world" \- esp. online. India is a huge nation and saying that
credit card penetration is low might be the understatement of the century.
People from all kinds of social, educational backgrounds are starting to use
plastic money and they need these "ridiculous" security measure (just like I
do).

Now, yes implementation is not as it should have been or isn't ideal, but try
to see the limitations and maybe come up with an idea and suggest it to the
proper authority. Maybe collaborate with other founders and try to reach the
RBI head - heard he is a very genuine and reasonable guy. But remember you
should go with a plan and not a rant!

~~~
icebraining
I agree, as an European not used to dealing with them before the Internet, the
system is just inane nowadays. "Just give these numbers to each and every
merchant you do business with, and trust they won't abuse or leak them.
Remember that you have to check each and every transaction to make sure it's
not fraudulent, and have fun paying higher prices because merchants get hit
with billions in fraud every year".

Our system of direct debit, where the client had (the rules might have changed
recently) to authorize each merchant to charge your account, is much saner,
even if some providers whine about it.

Protip: if your clients can't be bothered to spend 2 minutes authorizing your
charges, you're not providing enough value to them.

~~~
MichaelGG
The US system of authenticating the transaction vs the card/user seems to work
pretty well. The US rapidly adopted online commerce and payment. Consumers,
overall, have nothing to worry about. Since the merchants and banks are
responsible for fraud on credit cards, they seem to be a bit more on to of
things.

N=1, but with Wells Fargo, my credit card gets blocked now and then due to
suspected fraud. Once it was due to a cloned card being used. Bit of an
annoyance getting a new card (they're no Amex, who'd always overnight me a
card, no matter where I was), but otherwise I had zero financial worry.
Compare to my debit card. Not one have I even revived a warning about it, let
alone a block. Even when I gave it to someone to use and take cash out on in
another country.

EU and others seem to be rushing to implement strong auth, but as a consumer,
screw that. Use machine learning and law enforcement to deal with it and let
my experiences be unencumbered. Spending 2 minutes to authorize merchants
seems like a large annoyance.

~~~
icebraining
_Since the merchants and banks are responsible for fraud on credit cards, they
seem to be a bit more on to of things._

But are they?

"Total global payment-card fraud losses were $11.3 billion in 2012, up nearly
15% from the prior year. The United States—the only country in which
counterfeit-card fraud is consistently growing—accounted for 47% of that
amount, according to the Nilson Report: card issuers lost $3.4 billion and
merchants another $1.9 billion."

This kind of inefficiency doesn't come cheap. There's a reason why VISA and
Mastercard disallowed merchants to charge more for CC transactions.

 _EU and others seem to be rushing to implement strong auth, but as a
consumer, screw that. Use machine learning and law enforcement to deal with it
and let my experiences be unencumbered. Spending 2 minutes to authorize
merchants seems like a large annoyance._

How is having your card blocked and having to wait days to receive it not
being encumbered?

As for the debit card thing, that wasn't what I was talking about. I was
talking about remote payments, where we use direct debit, not debit cards.

~~~
MichaelGG
11 billion on what, 5-6 trillion in spending? So ~0.2%? In don't find that
particularly terrible at all, in the slightest.

I've only had to replace my VISA card once in perhaps ten years, so overall
it's not been an issue.

For direct debit, I get even more nervous. Now someone that's compromised my
phone/PC or whatever I'm using can make difficult-to-reverse transactions?

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awalGarg
Another limitation with Paypal in India is that Paypal cannot hold our
balance. This is really shitty :(

------
mqzaidi
Recurring subscriptions are live on paytm.com.

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johnkrnn
Brilliant analysis!

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shaan7
convenience is overrated

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witty_username
You nailed it.

