The e-commerce giant ‘Amazon’ has cancelled its one-month Prime membership subscription plan for its Indian customers. This comes after a mandate issued by the Reserve Bank of India (RBI) effective on April 27. Amazon updated that their one-month Prime plan and free trial offers are discontinued in India following RBI’s guidelines.
What is new?
In an official statement, they mentioned that from 27 April they are putting a temporary hold on the
(1) Free trial sign-ups for Amazon Prime
(2) New sign-ups for one-month Prime Membership (effective immediately till further notice)
What is Still Available?
However, the three-month Prime membership plan and the annual membership plan will be the same. Users can enjoy Amazon Prime subscription benefits by enrolling in a three-month subscription or annual Prime membership plan. Any users looking to purchase an Amazon Prime membership or new membership, can buy the subscription plans of Rs. 329 (three-month plan) & Rs. 999 (annual subscription plan) and enjoy Amazon Prime membership.
Reason Behind This
The Reserve Bank of India issued a directive to banks and financial institutions, instructing them to incorporate an additional security feature, AFA (additional factor of authentication), for recurring online transactions. All banks and financial entities were required to follow the guidelines and ensure implementation by September 30th.
The purpose of the AFA requirement, mandated by the RBI, is to advance the safety of digital payments. To secure repetitive transactions, it is crucial to integrate AFA during registration and the initial transaction. This entails limiting the number of transactions and enhancing notification protocols, including notifications before deduction, withdrawal facility, etc., to mitigate potential digital scams and protect users’ hard-earned money from theft.
RBI initially set the framework implementation date in December 2020 but extended it to March 31, 2021, after IBA’s request. The extended deadline allowed banks and financial institutions more time to comply with the RBI mandate. The Reserve Bank of India set a deadline for AFA to ensure secure digital transactions, aligning with ‘Digital India’ goals. The mandate, initially for cards and wallets since August 2019, was later extended to UPI transactions to enhance security
The Reserve Bank of India (RBI) issued the mandate to protect Indian digital users from financial fraud and enhance customer support. The deadline is crucial for effective framework implementation, aiming to prevent customer inconvenience. Financial institutions have requested the government to delay the AFA system, fearing disruption to auto-payment systems. Subscription charges for OTT platforms, EMI, bills, and mobile payments may face challenges with the new RBI mandate in place.
