Updated: We have changed the headline after One97 Communication confirmed it has 300 million overall registered users
In late February, before the end of the deadline for digital wallet companies to fulfil KYC norms, less than 10 per cent e-wallet’s customers had got their KYC done, according to media reports.
Digital wallet companies then became worried that strict government regulations would throw them out of the business. The concern seemed appropriate.
Paytm, the biggest fintech player has now been able to complete know-your-customer (KYC) process of only 100 million wallet users till now after the end of Feb 28 deadline. The company claims to have over 300 million customers.
In October last year, the RBI had directed prepaid payments instrument (PPIs) or digital wallets to complete full KYC of their users. Wallet users need to submit Aadhaar, permanent account number, driving licence or any other valid government ID.
After the October announcement Paytm decided to increase the ground workforce and open one lakh branches across the country to make it easy for its customers to complete their Know Your Customer (KYC) norms.
Despite the company’s best effort, several users also opted for getting minimum KYC done through the Paytm app by submitting Aadhaar number, permanent account number, or driving licence number, among others.
It means that users can open a wallet account with the basic one-time, password-based KYC, and the maximum amount the user can hold will be limited to Rs 10,000.
With minimum KYC, users can only use their mobile wallets to make commercial transactions like paying for a cab ride or electricity, but cannot make person-to-person payment. He also cannot transfer money to a bank account with basic KYC.
The problem for fintech companies is going to rise further as Unique Identification Authority of India (UIDAI) revoked access of fintech companies to e-KYC verification and authentication services in early April.
Some fintech startups across insurance, lending and broking sectors reported non-access of the Aadhaar database to provide e-KYC upgradation to onboard new customers.
This is after the Apex Court raised concern around multiple unregulated entities accessing the database during the hearing on privacy concerns around Aadhaar.