In what could be a major blow to Apple's subscriptions, the company has stopped accepting debit and credit cards for payments on its platforms in India as the June 30 deadline set by the Reserve Bank of India (RBI) for all merchants to stop saving card data of customers draws closer.
Customers can now only use NetBanking, Unified Payments Interface (UPI) and their Apple ID balance to make payments, Apple said in an email to customers which was viewed by Moneycontrol.
"In light of upcoming Reserve Bank of India regulations, starting June 1, credit and debit cards can no longer be used for purchases or subscriptions on the App Store or other Apple services. Apple will no longer store card information on file — protecting your payment method is our top priority," the mail read.
The mail further added that customers' subscriptions will continue only of they have sufficient balance in their Apple wallets.
"Your subscriptions will continue as long as you have a sufficient balance. If you are an Apple Music, TV+, iCloud+ or third-party subscriber and we cannot renew your subscription, your subscription will automatically expire," it said.
In a bid to increase customer safety and prevent fraud, RBI guidelines for payment aggregators (PA) and payment gateways (PG) state that PAs and merchants shall not store card credentials of customers in their database starting January 1, 2022. This deadline was later extended to June 30.
In the absence of an option to store card details, card networks such as Visa, Mastercard and RuPay along with banks, PAs and PGs are working on implementing Card on File Tokenisation (CoFT). CoFT replaces card details with a ‘token’, which will be unique for every debit or credit card and merchant platform where the card is used.
However, the move by Apple suggests that there could be major disruptions starting July 1 and that it does not expect implementation to be easy.
This is the second disruption in months after RBI's new norms for recurring payments caused widespread issues for customers. While many international platforms including Microsoft chose to continue customers' subscriptions by offering them free services for a few months, Apple had seen issues making that shift as well.
Back then too, Apple had asked customers to use their Apple ID balance to ensure their subscriptions continue.