[twilightfog]

> Not one Indian payment processor (I've talked to a many) gives you the option to create recurring subscriptions.

Not true, Paypal allows you to create recurring subscriptions in India, I already have two subscriptions which PayPal charges to my CC every month automatically. So, I'm questioning the premise of this post, PayPal certainly follows RBI regulations now, and if other payment processors are not doing it, it must be a business decision on their part, and maybe they will do it going forward. Can you provide any references of RBI policies prohibiting recurring subscriptions ?

[zodvik]

Is the merchant established in India?

[twilightfog]

After a search, I see that companies need to obtain the necessary clearances from RBI (Indian or international) to charge recurring payments on credit cards. These are only granted to businesses with established track records. So, yes, a SaaS startup might not qualify for it. But as a consumer, I'm actually happy with this RBI policy.

[BronSteeDiam]

You're happy to have no SaaS startups? Do you think there might be an alternative solution, that doesn't through the baby out with the bath water?

[wcummings]

You can have SaaS startups w/o recurring CC payments.

[BronSteeDiam]

Talking about CC is a distraction, because the meaning varies in different countries. (debit, credit, post-office, chequing, etc)

The majority of SaaS startups rely on friction free recurring payments. An even larger number of companies have a subscription model; e.g. Spotify, Team Treehouse, Soylent, Birchbox, Makespace and Netfix. Then you have all the 'One Click Purchase' companies like Uber...

The list of companies you can screw over with unnecessary regulation is extraordinarily large.

[zodvik]

The problem with that -> there is no well defined criteria for what "established track records".

[orbifold]

I'm guessing it is companies that have enough money and influence to get the right government officials to "listen" to them.

[twilightfog]

an established business with 3 years+ track record OR $3 million or more in transactions.

I assume that's how PayPal got it, they certainly qualify for the $3 million criteria.

If they lower the bar, they will have to do it for everyone, and a lot of unscrupulous businesses will try to place recurring chargebacks. What's wrong with billing the client every payment cycle, or let them pay on longer durations, like quarterly? Refund extra money if someone discontinues earlier. Plenty of options, until 3 years of a financial history, then apply for a RBI clearance.

Credit card fraud is very common across the world, maybe the guidelines can be more clear and the clearance process made simpler, however I don't see why a startup should be allowed to place recurring charges on cards unless they have been a trustworthy business for a while.