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Posted on:    03 Mar, 2018       Views:  697

KYC now mandatory RBI rejects stringent KYC rules Customers threaten digital wallet services

Most popular wallets are now offering their customers cash-back schemes to motivate them to complete the KYC process. Paytm services will be disabled until your KYC details are updated. The process for most e-wallets is nearly the same: You open the app and type your registered mobile number. Mobile wallet company are very popular in india such as Paytm, Rupay etc have invested sums as large as US dollars 500 million to get KYC process done for its 280 million-plus customers. The Reserve Bank of India (RBI) has turned down a request from mobile wallet entities for less stringent Know Your Customer (KYC) rules. A few weeks earlier, major companies in this segment and in financial technology, along with senior members of the sectoral body, Payments Council of India (PCI), met RBI officials. They requested that if a general relaxation was not possible, it could be considered for at least transactions less than Rs 10,000 a month. Source say RBI would have none of it.

KYC now mandatory RBI rejects stringent KYC rules Customers threaten digital wallet services

Several operational wallets were forced to cut off customers from March 1, as per guidelines issued by the top bank. Paytm, Ola Money, Mobikwik, Freecharge and others have stopped services for those who do not have minimum KYC norms in place. However, even with minimum KYC, users can avail limited features. The full verification process for KYC, as per mandated by the apex bank, requires these wallets to collect information on customers including identification details, photograph, and biometrics.   

After submiit your required details for KYC and enter information about us (Using Aadhaar as an example), you will need to enter the OTP (one time password) received on your registered mobile number.

You will need to provide additional details for complete registration like your parents' names, marital status, and your PAN number as well. Some other documents like residential proof are needed too. 1 is either many wallets company in india through BHIM UPI and other source , and the other via in-person verification.

The RBI's directive plans to make these wallet services secured, but industry experts told ET that least eight out of 10 customers using mobile wallets in the country do not have KYC norms in place. It had asked digital payments companies in October 2017 to ensure that the payment instruments issued by them adhered to full KYC norms by the end of February 28. Data cited in the report indicates that almost 32 crore transactions amounting to Rs 14,334 crore were recorded via prepaid instruments in the month of December. Out the whole amount, 28.83 crore were mobile wallet transactions amounting to Rs 12,568 crore. However, a certain drop in profits can be expected due to the new KYC rules.

The Payments Council of India, an industry body, appealed to the central bank to allow users whose wallets do not exceed Rs 10,000 to operate without the full KYC, but the Reserve Bank turned down the plea saying all payment methods must abide by KYC rules as they are a part of the banking ecosystem. However, you wallet balance will remain unaffected.

According to sectoral players, only 35-40 per cent of all prepaid payment instrument users heeded the repeated requests sent for getting a full KYC done. “Hardly 30 per cent of the users clicked on the requests sent to them on their mobile phones for a full KYC. Even less numbers came to our booths to submit Aadhaar details or called our agents home. It has been a struggle getting people on-board,” said a senior executive of a mobile fintech entity, which has over 150 million users.

The exponential growth of mobile wallet companies witnessed a massive surge in profit after demonetisation wiped out 86 percent of liquid cash from the market. While Paytm was the biggest gainer, others such as MobiKwik and OLa Money joined the party later. But with the KYC mandate, the year-long profit bonanza may be coming to an end for digital wallets.

KYC now mandatory RBI rejects stringent KYC rules Customers threaten digital wallet services

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