wordpress blog stats
Connect with us

Hi, what are you looking for?

Netflix is violating RBI’s two-factor authentication and forex rules for payments

netflix (1)

My bank called me when I tried to sign up for Netflix. I use a HDFC Bank debit card and had not set limits on for international payments. Netflix did mention that payments will be processed internationally and that foreign transaction fees apply.

netflix 2FA 2

I entered my card details, which included my card number and CVV code, a few minutes after my bank set my limits. However, Netflix seems to be violating the Reserve Bank of India’s guidelines for card not present transactions which mandates that there should be two-factor authentication for card payments online and that settlement of transactions should be made by an Indian bank.

I did not receive an one-time password on my phone and Netflix redirected me to this page which said that the payment was successful.

Netflix 2FA 1

I also received a message on my phone that the payment was processed by Netflix in Amsterdam. Curiously, HDFC Bank’s representative who called me said that the payment to Netflix is being routed to a merchant in Singapore.

netflix 2fa 3

Users on Twitter had also spotted that Netflix was bypassing two-factor authentication.

Previously, the RBI had mandated that entities that route online billing internationally, for goods and services purchased online using Indian cards, need to include a second factor of authentication, and route transactions through a bank in India.

Uber’s problems with two-factor authentication

Readers will remember that cab hailing service Uber had run into similar problems in 2014 and had to comply with RBI’s guidelines on card-not-present transactions and to tie up with mobile wallet Paytm to facilitate transactions in India. Uber has since resumed payments via cards in July 2015 and tied up with Delhi-based Zaakpay, a digital payments gateway, to enter a CVV  and a one-time password received on their mobile phone to pay for the cab ride.

MediaNama’s take

We’ve pointed out earlier that there is a lot of confusion on the nature of RBI’s two-factor authentication and foreign exchange rules. It is unclear whether these rules impact purchases only made in India, or they impact all purchases made using Indian cards in India (in which case, all transactions using Indian cards will have to be in INR). Many users have pointed out that purchases made on Amazon.com, gaming marketplace Steam and other international websites do not go through two-factor authentication and it remains to be seen how the RBI will handle this situation. Netflix should have done its homework on this front and taken lessons from Uber on how to enter the Indian market.

Image by Matt Perreault, used under CC-BY-SA.

You May Also Like


MobiKwik’s net revenues grew by 134% to ₹379 crore at the end of FY20 from ₹162 crore on the back of higher revenue from...


Non-bank lender Bajaj Finance is planning to enter the competitive Unified Payments Interface (UPI) market with its own third-party app called Bajaj Pay. The...


Netflix’s two day StreamFest in December 2020—where users in India could practically watch Netflix’s entire catalogue for free—brought millions of users to the service,...


Digital payment adoption has grown significantly in the last year, reflecting a secular trend among Indian consumers and businesses, TR Ramachandran VISA Inc’s group...

MediaNama is the premier source of information and analysis on Technology Policy in India. More about MediaNama, and contact information, here.

© 2008-2018 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ

Subscribe to Daily Newsletter

    © 2008-2018 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ