What You Need to Know About India’s New Subscription Rules
App store changes that may affect your business
Sharif MoustafaJune 16, 2021
Updates to Google Play Subscriptions in India
On August 31, Google sent out a notification in the Google Play Console with updates for subscriptions in India. These updates are slated to take effect on September 30. Briefly, these updates are:
- Auto-renewing subscriptions, free trials, and introductory pricing will be available in India after September 30.
- Auto-renewing subscription products will be capped below 5,000 INR.
- Customers whose banks aren’t compliant with the new RBI regulations won’t be able to purchase subscriptions.
- Customers who purchased auto-renewing subscriptions before May 4 will be moved to a grace period that expires on September 30.
Auto-renewing subscriptions, free trials, and introductory pricing will be available to purchase in India after September 30
Hooray! After September 30, Google will allow users in India to purchase and renew auto-renewing subscriptions, as well as redeem free trials and introductory pricing. This calls for celebration, right? Well… not so fast. The return of auto-renewing subscriptions on Android in India comes with a few catches that didn’t exist back in May.
Auto-renewing subscription products will be capped below 5,000 INR
Starting September 30, any subscription products priced at or above 5,000 INR will be converted to non-renewing subscriptions when offered to Indian customers. To keep your subscriptions auto-renewing, make sure your products are priced under 5,000 INR. This is the biggest change in the update. Refer to our guide on configuring products in Google Play to make sure your subscription prices meet this new limit.
Customers whose banks aren’t compliant with the new RBI regulations won’t be able to purchase subscriptions
The onus of implementing the new RBI regulations is on the banks of India, so widespread compliance will likely happen gradually. In the meantime, any bank that doesn’t adopt the new requirements by September 30 will not be allowed to authorize purchases of new subscriptions. This means that some of your customers in India won’t be able to purchase auto-renewing subscriptions. Instead, Google will offer a non-renewing variant of your subscription that those customers can purchase. Since this information is not available to your app when you present the paywall, you won’t be able to inform affected customers that they can’t automatically renew their subscriptions. Make sure you have resources available on your support page to help customers who run into this issue.
Customers who had auto-renewing subscriptions before May 4 will be moved to a grace period that expires on September 30
Customers who purchased auto-renewing subscriptions before May 4 were grandfathered in so that they could continue automatically renewing their subscriptions as long as they kept them active. Now that the new regulations are going into effect, even these users will have to update their billing information in Google Play to ensure that their credit card providers can authorize new auto-renewing subscriptions. Any customers who don’t verify their credit card details will have their subscriptions cancelled so they cannot automatically renew.
The fix, of course, is for users to go into their settings and update their credit card details. But that’s easier said than done! Google is telling users to verify their cards, but there’s a good chance that at least some users won’t — which may lead to an uptick in cancellations in your app, particularly among Indian customers. Keep an eye on your subscriber retention chart. If you see a dip in subscriber retention after September 30, try setting the country filter to India to see if the dip is significant. If it is, you can target those users with emails and promotions to encourage them to update their billing details and resubscribe.
If you have subscribers in India, chances are you’ve heard about some upcoming app store changes that may affect your business. But in case you haven’t, we’re here to fill you in.
For the past two years, India has been working toward an SCA-like system for recurring transactions. There’s a lot of fine print, but in a nutshell, India’s central financial regulatory body — the Reserve Bank of India (RBI) — recently enacted new rules requiring an additional layer of authentication for prepaid recurring transactions. As of April 1, 2021, consumers in India must manually authenticate recurring transactions over a certain amount.
RBI originally gave payment processors until March 31, 2021 to become compliant with this new framework. However, many organizations failed to meet the original deadline, so RBI issued a new deadline: September 30, 2021. During this time, any payment processor that isn’t compliant can’t process new recurring transactions.
In response to these new regulations, Google has suspended new auto-renewing subscriptions, free trials, and introductory pricing in the Google Play Store in India since May 4, 2021.
As with any new regulation, it’s important to dig into the details of how this will play out. Here’s what you need to know:
New subscriptions will not auto-renew
This means your Indian users will need to purchase their subscription again after it expires.
Note that this change only affects new subscriptions — existing auto-renewing subscriptions in India will continue to renew as expected.
New subscriptions cannot have free trials or introductory pricing
Unfortunately, you won’t be able to offer free trials or introductory pricing to users in India. This has to do with how Google handles upgrades and downgrades. Google’s proration logic depends on subscriptions auto-renewing — refunds are added to the next renewal of a subscription. But since subscriptions can’t be auto-renewed anymore, Google has disabled free trials and introductory pricing.
This means that any users who are currently signed up for a free trial will most likely lose access and won’t auto-renew to a paid subscription.
What this means for Android app developers
If your app is listed on the Google Play Store in India, there are a few steps you can take to keep things running smoothly for your users.
Adjust the wording on your paywall
Remove any mention of free trials, auto-renewals, and introductory pricing from your paywall for users in India. There are a couple of ways to do this:
- Check the currency of the SkuDetails using getPriceCurrencyCode.
- When the currency code returns INR (the code for Indian Rupees), dynamically change the wording on your paywall.
It’s also a good idea to add in-app messaging that informs users in India that their subscriptions will not automatically renew, and encourage them to resubscribe at the end of their subscription period.
One caveat here is that these regulations could technically apply to Indian citizens who use Play Store accounts in other geographies. It’s common for people outside the US to set up Play Store accounts based in the US (and even use a VPN) to get access to apps and content not available outside the US. That being the case, keep an eye out for how these regulations are interpreted as they roll out. And when in doubt, always talk to a knowledgeable lawyer or other compliance professional.
Create a separate offering for your Indian subscribers
Google recommends removing free trials and introductory pricing from your app altogether, but that doesn’t make a lot of sense for apps that also have users outside of India. Free trials and introductory pricing are a great way to get new signups — removing them for all potential subscribers could mean fewer conversions and reduced revenue.
Instead, we recommend offering a different SKU in India that doesn’t include a free trial or introductory pricing. RevenueCat can help you with this. Just create an offering for your Indian users and display it in your app accordingly.
Another option is to replace your auto-renewing subscription SKUs in India with one-time product SKUs. This is one of the options Google recommends, but for some apps it might be easier to continue offering subscriptions and let Google handle whether or not they auto-renew.
Update your introductory pricing eligibility logic
If your app includes introductory offers, you may need to update your introductory pricing eligibility logic. Since it’s no longer possible to provide introductory offers in India, you’ll need to update your pricing eligibility logic to avoid showing messaging about introductory offers to users in India. To do this, use the same logic you use to prevent current and former subscribers from redeeming an introductory offer. Check for the user’s currency, and if it’s INR, deem them ineligible for the introductory offer.
What about iOS apps?
So far, Apple hasn’t made any announcements about the new RBI rules. It’s possible that Apple is already compliant with the new framework, so they don’t need to send out any communications about it.
If and when Apple announces changes for apps listed on the App Store in India, we’ll update this post.
Good news for RevenueCat users
As far as we know right now, your entitlement status tracking in RevenueCat will not be affected by these changes. We use subscription purchase and expiration dates to determine a subscriber’s entitlement status, which will continue to behave as normal.
However, there are a few metrics that might be affected:
- Auto-renew status
- Churn and cohort charts
- Trial conversion chart
- Trial start rate chart
- New purchases & trials chart
Depending on how Google displays these changes in the receipt and the proportion of your users in India, your RevenueCat charts may exhibit some abnormalities.
The churn and cohort charts may show spikes and upward trends. But this isn’t necessarily bad news – active subscriptions should not be affected because they’re allowed to automatically renew. And you can continue accepting new purchases in India. A key component of our churn formula factors in the number of new purchases minus the number of expired purchases per day. Without auto-renewals, users may be waiting longer than a day to resubscribe, which makes churn look higher than it really is.
The trial conversion and trial start rate charts may show dips or even drop off drastically, depending on your exposure to the Indian market. Again, this is simply a result of Google’s pause on free trials. Users should still be able to purchase new subscriptions. Rather than focus on free trials, you should check for trends and patterns in your active subscriptions chart.
If you’re listening to RevenueCat’s webhooks to update your systems, you may receive higher-than-normal billing issue notifications for your Indian users. This is because when an Indian user purchases a subscription, Google indicates that the subscription was canceled by the system. While this doesn’t necessarily mean that a billing issue occured, nine times out of ten, Google cancels subscriptions because of billing issues. When RevenueCat detects that the subscription was canceled by the system, a BILLING_ERROR cancellation notification is sent. Since every subscription purchased in India will be canceled by Google, RevenueCat will send a billing issue notification. On your end, you should check the currency field of the notification: if it’s INR and a billing issue, you should disregard it. Alternatively, you can check RevenueCat for the first purchase date of the user’s subscription. If it was purchased before May 4, then this billing issue is legitimate, and you should send this user through your billing issue flow. If it was purchased after May 4, you can safely ignore this notification, as it was likely generated right after the initial purchase of a subscription that can’t be auto-renewed anyway.
We’re keeping an eye on the situation and will provide updates as we learn more from Google.
[Update] We have learned nothing more from Google, but have found out on our own that upgrades/downgrades can’t be done. You just have to wait out the billing cycle before you can buy the next level up/down.