The move by the RBI might have a negative impact on ecommerce platforms and taxi aggregators such as Google Play, Amazon and Uber, as these companies route credit card transactions through an international payment gateway and circumvent the two-step verification mandated by the RBI.
The bank declared that camouflaging and flouting guidelines on card security was made possible by merchant transactions being acquired by banks located overseas resulting in an outflow of foreign exchange which is in violation of violation of the directives under the Payment and Settlement Systems Act and the Foreign Exchange Management Act, 1999.
The directive will be effective immediately, but existing arrangements if any, will be accorded by end of October 2014 to comply with instructions and avoid any business disruption.
Every day we send out a free e-mail with the most important headlines of the last 24 hours.
Subscribe now