For companies and entrepreneurs exploring digital subscription models of revenue, mobile wallet company, Paytm, has announced the launch of its recurring billing service. The service is currently applicable to cloud-based companies that are providing newsletters, media content, web-based video streaming applications and websites.
According to a report in ET Tech, the feature will allow entrepreneurs and developers use the platform as a channel for recurring payments. After a single time authorization the recurring subscription amount will automatically get debited from the user’s Paytm wallet depending on the payment interval structure.
This would ideally remove the OTP (one time password) or 3D secure password payment, which was mandated by the Reserve Bank of India (RBI) for all digital payments by plastic currency. According to many companies based in India , this second layer of authenticating the payment acted as a speed-breaker to a seamless process of purchase.
The RBI mandate stated that the companies registered in India could not follow the recurring payment process digitally as it was mandatory to add that second layer of authentication. The loophole was that the mandate was not applicable to companies registered outside India, or on the use of cards outside the country.
“Accepting recurring payments as an Indian company is very challenging. Most of the Payment gateways do not support recurring payments at all or on majority of cards and/or international cards. Indian Entrepreneurs face a lot of challenges in this area as the only option left for them, is to register outside the country, open an international bank account & payment gateway to accept payments on regular intervals. This, in most cases is a long and expensive process,” says Preet Sahil Singh, Founder of a SaaS-based company, who had to register his company overseas to kickstart recurring payment service for his customers.
In the past digital wallet companies and payment gateways such as FreeCharge, CC Avenue, RazorPay among others have processed recurring payment models for companies. But the payments have been done on standing instructions left with the banks and are not authenticated transactions as per the RBI mandate, which is also communicated to the customers.
Media reports claim that the launch of Paytm’s recurring payment system will help entrepreneurs and developers to use the company’s APIs, SDKs and Plugins to accept recurring payments from customers within hours. Reportedly, applications such as Gaana, Saavn, and Hotter are already on-board with the payment option and the platform has also started providing plug-ins for ecommerce firms like Magento, Drupal Commerce and WordPress.