In a development that seems to have left digital payment apps users clueless, payment major Paytm and PhonePe are not accepting Aadhaar number for mandatory know your customer (KYC) process.
Users are now given options such as passport, Voter ID, driving licence, Nrega Job card and PAN card instead to choose from. Aadhaar was earlier insisted by these firms to verify accounts. Users can not transfer funds or pay without getting the KYC process done.
Paytm Bank in a tweet said that it’s not accepting any request to open any Payment Bank account.
@_sahil022_ Hi, Currently we are not accepting any new KYC requests to open any Paytm Payments bank account. We regret the inconvenience caused. We will let you know Once the systems are up.Thanks!
— Paytm Bank Care (@paytmbankcare) September 4, 2018
Five months ago, Unique Identification Authority of India (UIDAI), had first revoked access to a dozen agencies including Airtel and Reliance Jio that provide e-KYC verification and authentication services.
It barred some of these agencies KUAs (e-KYC user agencies) and AUAs (authorized user agencies) to provide e-KYC verification to onboard new customers, authenticate financial transactions affecting e-wallets and fintech players.
Jitendra Gupta, founder of Citrus Pay and MD, PayU India, an online payments service, tweeted the development then.
Aadhar stopped all KUA and sub KUA to do validations!! Suddenly , all fintech businesses banking on Aadhar left scrambling!! India stack story will crumble very soon if it continues in this manner.@India_Stack @NandanNilekani @UIDAI
— Jitendra Gupta (@guptajiten) April 4, 2018
Industry experts said the development will cause trouble for fintech service providers and cause a problem in onboarding customers. It would lead to a rise in operational cost for existing players and lower the number of new users.
Entrackr tried to cross-check the development in more than 10 mobile devices and found none of them showing Aadhaar option for Paytm Payment Bank and Paytm wallet. However, Paytm Bank Care in response said that Paytm is accepting Aadhar card for KYC.
Whereas PhonePe in a response to Entrackr queries said the process to complete KYC is currently unavailable. However, users can utilize the wallet amount for in-app transactions & make payments to registered merchants.
Meanwhile, the Quint report quoting PhonePe representative said that its Aadhaar eKYC license was pending for approval with the UIDAI and even requesting entities for UIDAI like the KUA was told to stop supporting verification for the Flipkart-owned payment platform.
Update: The post has been updated with Paytm and PhonePe responses.