Years after it first launched in the US, Netflix has finally arrived on Indian shores today — but the streaming service may have to clear a significant regulatory hurdle if it intends to continue operating in the country.
You need a credit card to subscribe to Netflix, even if you only want to try the month-long free trial. In India, Netflix merely asks for your card details and signs you up in a single step.
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Trouble is, in August 2014, the Reserve Bank of India (RBI) made it mandatory for international businesses to implement two-factor authentication for online credit card transactions.
Since Netflix is processing payments internationally, it is obliged to include a second authentication measure, such as a one-time password sent to users via SMS.
Uber got itself in trouble over the same issue in October 2014, back when it only accepted credit card payments for rides in India using stored card details. The company chose to partner with mobile wallet service Paytm before it was allowed to re-enable transactions in the country.
Uber resumed accepting credit cards last July and passengers now complete their transactions by entering their card security code, plus a one-time password, before they hop out the cab at their destination.
It’s possible that the RBI will clamp down on Netflix’s operations until it reconfigures its payment system, but then again, Netflix could resolve the issue before it hits a roadblock.
We’ve contacted the RBI and Netflix to learn more and will update this post when we hear back.