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Uber resumes payments through credit card in India

UberBeginning today, ride sharing app Uber Technologies Inc has resumed accepting credit card payments in India.

Uber’s app has been tweaked for the two-factor authentication (2FA) flow that the Reserve Bank of India (RBI) mandates for all card-based payments, the company said in a press statement.

This feature is available to all Android users immediately and will be extended on the iOS platform in the coming weeks.

Uber had stopped accepting payments through credit cards (issued in India) and debit cards seven months ago after it was pulled up by the RBI. As a safety measure, RBI requires all credit and debit card transactions to undergo a two-step process for honouring payments. Typically, a user swipes or enters the credit/debit card information in the first step and then has to enter a password in the second step.

Uber followed only one-step authentication and directly billed users at the end of the ride, which fell foul of RBI rules. The San Francisco-based company had tied up with mobile wallet firm Paytm to sidestep the 2FA compliance requirement. Uber will continue to accept Paytm payments, it said.

For credit card transactions, Uber would also allow riders to use more than one card. It will accept all major credit cards issued by Mastercard, Visa and American Express.

After some difficult months, things are starting to look up for Uber, which competes with Ola for a share of the burgeoning cab aggregation space. Last week, the Delhi High Court set aside a Delhi government order that rejected Uber’s application to operate in the national capital. While the court said that Delhi authorities can impose strict conditions to regulate app-based taxi companies, it was in disfavour of a complete ban.

Uber was under Delhi government’s scanner from December last year following rape allegations against one of the drivers contracted to the firm. The government went on to ban Uber and Ola from offering service in the state as they do not have licence under Modified Radio Taxi Scheme 2006 of Transport Department of Delhi. However, Uber cabs have been operating in Delhi despite the ban.

Earlier, Uber said that it will invest $50 million in Hyderabad over the next five years to establish a facility that will house hundreds of its employees and would be its biggest international office.

In a recent interview with Techcircle, Eric Alexander, Head of Business (Asia) at Uber said that the company is growing at over 40 per cent on a month-on-month basis in India. Uber counts Bangalore and Kolkata as two of its fastest growing cities globally.

Earlier this month, Uber expanded its services to seven new cities, making India the largest geographical market for the cab-hailing app after the US.

In fact, some of India’s top investors are also backing Uber’s latest move to raise money globally from China’s Hillhouse Capital Group and others.

At least two Indian family offices have put in money in Uber by purchasing bonds that convert into shares at a 11.5 per cent discount to the ride-hailing company’s future initial public offering (IPO) price.

Uber is one the world’s heavily funded startups. Marque names such as Fidelity Investments, Wellington Management, BlackRock Inc, Summit Partners, Kleiner Perkins, Google Ventures, Menlo Ventures, New Enterprise Associates (NEA) and Qatar Investment Authority among others have put money in the company. Uber was valued at $40 billion during its last round of fund raising.

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