Trai's new traceability rules won't disrupt e-commerce OTP services

Trai's new mandate, set to take effect on November 1, would require traceability of messages sent by principal entities, including banks, e-commerce platforms, and financial institutions

E-commerce companies don’t foresee any impact from the concerns raised by telecom operators regarding disruptions in delivering essential transactional and service messages following a new directive from the Telecom Regulatory Authority of India (Trai).

 

Telecom companies are reportedly warning that essential messages, such as one-time passwords (OTPs) and other critical communications, may not reach customers. However, executives at e-commerce companies said they have alternatives, such as sending OTPs through WhatsApp and shopping apps. Many e-commerce firms have already been sending OTPs to customers through such platforms.

 

“We don’t see it as a challenge. There are already other platforms, such as WhatsApp, through which one can send OTPs to customers,” said an executive at an e-commerce firm. “We also believe the majority of customers who are using the e-commerce service already have access to smartphones.”

   

The mandate, set to take effect on November 1, would require traceability of messages sent by principal entities (PEs), including banks, e-commerce platforms, and financial institutions.

 

This is because many telemarketers and PEs have not yet implemented the necessary technical solutions to comply with the new mandate.

 

“We are getting orders from remote parts of the country, and as per our analysis, most of them use phones for shopping,” said an executive at another e-commerce firm.

 

According to industry data, around 1.5–1.7 billion commercial messages are sent daily in India. The failure to deliver these messages could cause widespread disruption if the new rules lead to blocking or delays.

 

Telcos have informed the regulator that, while their systems are ready to comply with the new regulations by November 1, many telemarketers and PEs need additional time to complete the necessary technical updates. As a result, PEs are reportedly seeking a two-month extension to finalise their preparations.

 

India’s festive season is expected to ignite a major boost for the country’s e-commerce sector, with sales expected to reach Rs 100,000–120,000 crore in gross merchandise value (GMV), according to an analysis by Redseer Strategy Consultants. The analysis forecasts 20 per cent year-on-year (Y-o-Y) growth, fuelled by high pent-up demand and a premiumisation wave.

 

Redseer’s study indicates that the combination of rising consumer confidence, high pent-up demand, premium product promotions, and the growing influence of quick commerce will drive significant growth for India’s e-commerce sector this festive season.