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“None of us are expecting disruption on recurring [payments]. Also, recurring’s scale is extremely small compared to one-time payments,” Haria said. Due to limited scale, concerns like transactions per second and peak transaction load are not as big when it comes for recurring payments, he said.
One-time payments are fully operational and well-tested but merchants are nervous because they haven’t been able to test recurring payments properly, an executive at a large payments platform told BQ Prime on the condition of anonymity. The migration of existing e-mandates for recurring payments to tokens is also currently a pain point for payment processors, this person said.
Even though all has not been sorted out with token-based card payments, industry executives said things are much better now as opposed to how they were back in June—close to the previous deadline.
“Last time, on the acquirer side and on the issuer side, the integrations were not in place,” Reeju Datta, co-founder of payments processor Cashfree, told BQ Prime. Things are much better integrated now and Cashfree hasn’t observed a sizeable difference in transaction success rates between tokenised and non-tokenised payments, he said.
In addition to possible failures in recurring payments, there are also other factors that could be making merchants nervous about tokenisation.
“Some of the nervousness is also on the IT cost [associated with tokenisation],” Vivek Iyer, partner at Grant Thornton Bharat said.
He said the shift will require merchants to make changes to their payment infrastructure and hence impose additional costs while also reducing consumer convenience. A successful recurring payment, for instance, will require a customer to both tokenise their card and set up an e-mandate for the payment which has proven to be anything but straightforward in the past, Iyer said.
While payment processors remain confident about the upcoming transition, other industry bodies have written to the RBI about issues that continue to persist.
In a recent to the RBI, the Merchants Payments Alliance of India and Nasscom highlighted that one-time card payments using tokens have a success rate between 60-65% and some merchants are yet to even receive beta versions of token flows developed by payment gateways and aggregators.
All said, the 16 month trek to tokenising cards in India seems to be drawing to a conclusion. With one-time payments more or less squared away, the biggest hit of the shift might yet again be borne by a segment of merchants that are yet to fully recover from the regulatory change that shook them last October.
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Image and article originally from www.bqprime.com. Read the original article here.