Uber has until the end of October to introduce two-step payments in India, or face a ban

Uber has until the end of October to change its payment process in India or risk being banned from operating there. That’s because the country’s reserve bank (the RBI) has issued new guidelines that require two-step verification system for certain card payments.

A directive relating to Card Not Present (CNP) transactions issued on Friday requires companies which automatically charge customers for goods — such as Uber and other taxi-booking services — to introduce a second, verification step that authenticates a payment before it is made. Uber currently requires all users to provide a credit card to use its service, which it uses to automatically bill in a single step after each ride is completed.

RBI has given companies until the end of October to make changes. Uber has previously said it will be flexible on payment methods in Asia — Mike Brown, its regional general manager in Southeast Asia, told us it could embrace cash payments and other new strategies — so it seems likely that it will do as required in order to comply.

India became Uber’s second largest market in terms of cities served last week, when it expanded into four new locations in a single day. The company has plenty of competition from local rivals though. Olacabs recently raised a $40 million funding round, while Meru Cabs (rumored $50 million) and Taxiforsure ($30 million) have also taken on cash from investors lately and have plans to expand.

We contacted Uber for comment, but did not receive a reply at the time of writing. We will update this post with any information that we receive from the company.

Update: Uber declined to comment on the news.

Update 2, August 26: Uber provided the following statement to TNW:

With more Uber cities in India than in any other country outside the US, riders, drivers and communities across the 10 cities have embraced Uber. We are working to gain more clarity on this new rule while we continue to connect riders in India with safe, reliable, and convenient rides.

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