Finally, some good news for digital wallet players in India as RBI has extended the full KYC deadline for all including Paytm, PhonePe, Google Pay and Mobikwik by six months.
As per these directions, PPI issuers are required to complete the Know Your Customer (KYC) process by August 31, 2019. This is the third extension by RBI to e-wallets.
In an official statement, RBI said that the decision was based on requests received from various stakeholders to deferred the deadline on account of difficulties in undertaking Aadhaar e-KYC and time necessary to put in place alternative systems for completing the KYC process.
Reserve Bank of India extends timeline for completion of KYC for PPIshttps://t.co/ZU40MAMCZ9
— ReserveBankOfIndia (@RBI) February 25, 2019
Earlier, industry reports suggested that more than 90 per cent mobile wallets may stop being functional by March. This will revive the hope of mobile wallets that were facing a decline in transactions in the recent time especially after the Supreme Court ruling on Aadhaar.
In September last year, the Apex Court barred private entities to use Aadhaar for electronic know your customer (e-KYC) to sign up a new customer.
At present, the central bank allows users to carry out transactions up to Rs 10,000 a month with minimum KYC. These wallets will have a limit of Rs 1 lakh and all facilities for fund transfer will be allowed.
Prepaid payment instruments cannot be loaded with more than Rs 50,000 per month and the issuers cannot pay interest on the PPI balances, the Reserve Bank said then.
Among the aforementioned players, only Paytm was expected to have done around 70 per cent KYC of its customers.
Apart from KYC deadline, the RBI’s decision to make all wallet interoperable will also get enough time to come into force. The banking regulator in its notification in October 2018 said that it will soon facilitate cross wallet money transfer to all KYC compliant PPI’s.