The Apex Bank’s directive to link KYC to one’s ID has made online payment cumbersome.
Bangalore, March 15, 2018: It is no longer easy to tap and pay from your smart phone in case you run out of cash. Prepaid Payment Instrument (PPI) players like Paytm, Mobikwik as well as customers are facing a difficult time after the Reserve Bank of India made it mandatory to link one’s identification details through Know-Your-Customer (KYC).
Pramod Shenoy, a Shopclues manager and a former employee of a defunct Mobile Wallet provider, Momoe Technologies, said his former company had been making strides in the field of mobile payments. They had linked their payment solution with many popular hangouts in Bangalore like Toit. He added that after RBI announced the mandatory KYC implementation, the projected operating cost for the implementation became too high and as a result, the company had to be sold to Shopclues.
The RBI had issued new KYC norms last year for wallet users according to which wallets with a monthly limit of Rs 10,000 may be issued with limited KYC with a migration to full KYC within 12 months and all other wallets to be issued on a full KYC basis to ensure better security and safety of financial institutions. Last year, Paytm Payment Bank had invested $500 million to meet RBI’s KYC norms. However, many people still lack access to an Aadhaar card like Abdul Haris who is a juice and refreshment shop owner in Koramangala. He does not have an Aadhaar card and after the mandatory implementation has to depend on his friend who has an Aadhaar card for receiving his payments.
Gajendra M, who is an Ola driver saw decline in payment through mobile wallets in the last one and a half month. He said that he used to receive atleast Rs 500-700 through online wallets but now people prefer to pay in cash. He added that people have become reluctant to use wallets after the implementation of mandatory sharing of Aadhaar details through KYC.
Nihad added that his shop also has seen a sharp decline in mobile wallet payments in the last few weeks.
Asit of Paytm said that the company has always abided by government regulations and will continue to do so. He said people might be reluctant now but will get on board eventually.