Even as the Reserve Bank of India’s deadline to adopt tokenisation for cards nears and start-ups continue to find alternative ways to make payments, global vendors have started taking the extreme step of not accepting cards issued by Indian banks.

Recently, Chennai-based entrepreneur Nalin Narayan came in for a shock when Heroku, a platform-as-a-service (Paas) solution offering, announced discontinuing services to Indian customers citing issues with accepting subscription fee through Indian credit and debit cards.

Narayan is currently working on his CRM and marketing SaaS app for his stealth mode start-up and he had subscribed to Heroku for deploying his app and back-end infrastructure support.

“Thank you for your patience while we worked through the RBI regulation changes. Unfortunately, because of these new regulations, Heroku is unable to verify and process India issued credit cards for Heroku online customers,” Heroku said in an e-mail to Narayan. A copy of the e-mail was reviewed by BusinessLine.

The e-mail continued, “Effective December 15, 2021, Heroku is no longer accepting credit cards issued from India banks. Customers who are unable to utilise a different credit card will have until end of January 2022 to download their data, at which point their account will be suspended and then deleted.”

Heroku is a Salesforce-owned company. Detailed queries sent to Salesforce remained unanswered till the time of publishing. Narayan told BusinessLine that they are completely shutting shop in India, except for enterprise deals being done offline.

“The issue right now for me is to go for some other replacement product and they will have to support my development stack. It will take me at least a week to move everything out from Heroku to a new platform. And I am chasing deadlines at the moment,” he said.

Tokenisation

Tokenisation refers to replacement of actual card details with a unique alternative code called the ‘token’, exclusive for a combination of card, token request or and the device.

Based on the representations received from the industry seeking more time for implementing the ‘Guidelines on Regulation of Payment Aggregators and Payment Gateways’, the RBI had in March given non-bank payment aggregators six months, till December 31, 2021, to comply.

Payment failures

Many SaaS firms like Narayan’s which are subscribed to 60-70 SaaS platforms and tools to build their own products are facing serious challenges. Most had to review and renew each platform manually on a monthly basis, like Fyle’s Co-founder and CTO Sivaramakrishnan Narayanan.

Also read: NPCI enables the market on Tokenisation for RuPay users with NTS

“This is impacting our day-to-day business productivity. We have started getting notifications from all the platforms we are subscribed to. “Additionally, our cards work some times and other times they don’t, so we have to keep a backup card handy. Then, in some cases, we ask for the invoice to do a separate transfer. It’s basically things that used to run smoothly, are now a pain point,” Narayanan told BusinessLine.

Almost three out of five transactions have been failing for Indian customers trying to make payments using cards to Bengaluru-based SaaS firm Pathfix.

Sameera Vanekar, Founder, Pathfix, said they had to send personalised reminders, one-time payment links and do constant follow-ups with India-based customers to manually authorise payments on their website.

“We had reached out to popular payment gateway companies and they are still working on the e-mandate and tokenisation solution. I don’t think this has been resolved yet. Even for my payments to global companies like Stripe, it is not going through. I have to ask them for a one-time-payment link,” Vanekar told BusinessLine.

Related Topics