How to bypass the Indian ban on recurring payments.

by Jules Maregiano · February 15, 2022

Turning the Indian ban on recurring into an opportunity with annual plans and parity pricing.

Four months ago, the Reserve Bank of India enforced new regulations to protect cardholder’s safety. Online businesses have been impacted in the form of failing payments and angry mobs on their support chats. And it’s just the beginning.

Exportator mission is to make it easier for digital products to sell abroad. For that reason, we had to come up with a workaround on ban. After ours discussions with Stripe and our users’, here’s our best workaround we found.

Quick recap

  • Indian banks now have to get a 3DS (secure check) from their customers to validate any further payment (source).
  • They must alert customers before any automatic charge. That means sending out an email and validation or opt-out path each time.
  • Mandatory 3DS for payments over INR5000 (~US$66), every single time.

In other words, increased friction on all recurring payments. This results in failing cards, loss of business, and local competitors rising on the Indian market.

On top of this, the Indian financial ecosystem is still in the process of complying with those measures. Until then, many Indian consumers simply won’t be able to pay for foreign products.

So, what can we do?

It’s everywhere.

It’s everywhere.

Promote your annual plans. Hard.

We can’t cure the pain, but we can ease it.

Save your Indian customers (and yourself) time and efforts by going through the payment hoop only once a year. Encouraging your Indian audience to buy annual plans will have the following upsides:

  • Friction only happens once a year for customers.
  • Less support for you.
  • Longer Customer Lifetime Value.

There’s one big downside though: Annual plans are going to be too expensive for a country with significantly lower purchasing power such as India.


Offer regional discounts on your annual plans

India’s average purchasing power is low compared to the West’s: For instance, the average hourly rate for a software developer in the USA is US$35. In India, it’s US$5. You read right, it’s 85% lower.

Therefore, asking for 12x your monthly subscription (which was too expensive, to begin with) is going to be absolutely unaffordable. You need to offer a discount, and to make it significantly bigger than your current annual plan’s discount. You can read more about Parity pricing here.

How much discount should you give?

For B2C products. India’s Purchasing Power Parity Index is 18.93. This theoretically means that offering 74% off your base price is equivalent in terms of work time one needs to afford your product. Spotify offers its basic plan 90% off in India compared to the US!

If your audience speaks English and uses desktop computers, we can assume they’re among the more privileged people in India. In this case offering 50 to 60% off is a safe range.

For B2B products: Indian businesses have stronger purchasing power but still require a significant discount. According to Exportator’s data for B2B products, discounts around 40% off offer the optimal results in terms of revenues.

Market internationally like a pro

How do you market publicly your regional pricing. Visitors from other countries might see your offer, try to cheat the system, etc.

That’s where Exportator comes in. Exportator is a promo code management software for Stripe. It’s an overlay to Stripe that allows you to create much more powerful promotions.

  1. Exportator allows you to segment safely your visitors: Restrict your offer’s location to India and it’ll perform a VPN/proxy check before granting the promotion. VPN/proxy users won’t be shown any discount. Also, don’t forget to restrict your promotion to annual plans too.
  2. Display your promo codes: Banner, pop-up, slider, custom design. For each visitor, Exportator creates a unique promo code to avoid fraud and coupon trading. For untargeted visitors, Exportator is invisible.
  3. Optimize your promotions. We recommended earlier 40% from our current user’s data. But perhaps your digital product will benefit best from another amount. Exportator gives you detailed data about your promotion so you can easily find your sweet spot.

Is it worth it?

Regional restrictions are political measures meant to protect a country’s consumers and economy. They are an answer to the increasing level of competition on the Internet and are likely to become more common. Added to existing barriers such as infrastructure, language, and purchasing power disparity, selling online is going to change very much in the next decade.

Yet, they are huge opportunities in adapting. Did you know only 17% of the Internet speaks English? And 40% of the world is yet to go online? The size of the foreign markets is constantly increasing and competitive out there is capital for growth.

Exportator aims at providing the tools and the knowledge to facilitate foreign sales online.

Follow us on Twitter for updates.

Jules Maregiano

Jules studied export and was in charge of marketing a fast-growing SaaS. He created exportator after realizing the power of PPP for digital sales growth and to make the web cool again.

Let's make PPP the norm on the Internet
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