Domestic Routing Mandate Could Hinder CNP Transactions in India (Aug. 26, 2014)
India’s central bank now requires all card-not-present transactions for purchases within the country to be routed through a bank in India, with funds settled only in Indian currency. In a notice published last week, the Reserve Bank of India noted that some businesses were routing CNP transactions through foreign banks to circumvent existing requirements for cardholder authentication and validation. The mandate could hinder multinational e-commerce companies, including Uber, Google Play and Amazon, from providing services in India, because those providers route transactions through gateways located outside the country and thus do not require two-step verification for CNP transactions. The RBI’s new directive is effective immediately, but companies with existing foreign routing arrangements will have until Oct. 31, 2014, to come into compliance, the central bank said.
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