Uber Hits Out At India’s ‘Unnecessary And Burdensome’ New Payment Regulations

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Rules For Drones

Uber has lashed out at new regulations governing payments in India, after it called the mandating of two-factor authentication for all online transactions “an antiquated solution that is cumbersome for consumers and stifling for businesses.”

The U.S. taxi app company introduced a new wallet-based payment solution last month in response to new measures from the Reserve Bank of India (RBI). Today it fully switched over all payments to the wallet, but it said that adoption of the system has been “slow” among its customers.

At the time of launching its wallet, Uber made no mention of the RBI’s regulations, but today it came out swinging, arguing that user reluctance to switch from its credit card-based system “indicates their trust in Uber’s payment system and a preference for more convenient yet secure online/mobile payments.”

Uber is not the only company to be affected by the RBI rules, which require any online payment involving an Indian bank card to include a two-factor authentication process. The RBI said that the rules are designed to increase security.

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There are some upshots. Wallet-based payments mean people in India can now indirectly pay for their Uber rides using a debit card, internet banking account, or even cash to top up their balance. That removes the hurdle of having to own a credit card. Uber only accepts credit card-based payments in all other countries, but few in India own them. Despite opening up to a new audience, the U.S. company claimed that loading a wallet with pre-pay credit is “less convenient”.

Uber said it has had “constructive discussions” with Indian authorities, but it is asking for a 45-day extension period to continue to allow payments from credit cards since it said so few customers have switched over to the new payments. That, it argued, effectively means they will be unable to use the service, and that will affect its drivers too.

The U.S. company has been trying to hard to raise attention of the change. Last month, it offered wallet-compliant users free rides for five days to spark their interest, but based on today’s blog post it seems that adoption rates have not been as high as it hoped.

Update: The original version of this article mistakenly referred to the Reserve Bank of India as the Royal Bank of India. Our apologies for any confusion caused.

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