New Delhi | Jagran Business Desk: Are you a regular user of Over The Top (OTT) platforms and use the auto-debit method for payments? If yes, then you need to change your mode of payment from October 1 or else you will lose the services of popular OTT platforms like Netflix, Amazon, Hotstar, etc., due to the new auto-debit rules introduced by the Reserve Bank of India (RBI).
According to the new RBI rule, the automatic deduction of payments for OTT apps will stop and users have to renew their subscription monthly through the help of Additional Factor of Authentication (AFA). The rule was introduced to curb hacking and internet banking theft cases.
The process of Additional Factor of Authentication (AFA) would include monetary transactions made by debit cards, credit cards, Unified Payments Interface (UPI), or other prepaid payment instruments (PPIs).
"The requirement of Additional Factor of Authentication (AFA) has made digital payments in India safe and secure. In the interest of customer convenience and safety in the use of recurring online payments, the framework mandated use of AFA during registration and first transaction (with relaxation for subsequent transactions up to a limit of ₹2,000, since enhanced to ₹5,000), as well as pre-transaction notification, facility to withdraw the mandate, etc," RBI said.
It further added, "The primary objective of the framework was to protect customers from fraudulent transactions and enhance customer convenience."
What is Additional Factor Authentication (AFA)?
With the help of Additional Factor Authentication (AFA), OTT platforms will inform users about the deadline of their subscription and will take their confirmation on whether they want to continue with the subscription of the OTT platform or not.
Earlier, the Reserve Bank of India was set to introduce the AFA rule on 1, April 2021. However, RBI extended the rule by 6 months and now the AFA rule will be implemented from October 1, 2021.
Posted By: Mallika Mehzabeen