Ahead of RBI deadline to do physical verification to fulfill the requirements for e-KYC norms by the banking regulator, many mobile wallets companies are finding themselves in trouble.
Industry experts claim that doing physical KYC in such a short time frame will be a daunting task, however, the real concern cropped up is the expense involved in this process.
Now, these companies can’t bypass RBI guidelines and the August 31 deadline, so they are reportedly mulling over an alternative route to complete the process. One of the convenient ways will be video KYC for which a clear guideline is yet to come.
If implemented, video KYC can reduce the cost as well as workload by a significant margin. At present, mobile wallets companies have to bear around Rs 250 for each customer on physical KYC.
The issue was highlighted by digital payments major Paytm when it estimated that doing physical KYC will give an additional burden of Rs 2,500 crore on the company as it has around 100 million customers without full KYC.
An ET report also said that some big companies are moving on to a Unified Payments Interface-based system to bypass the mandatory KYC requirements.
As far as video-based KYC is concerned, it’s a viable process and had been suggested by some technology startups. Even RBI was mulling to introduce new modes of electronic verification of customers, including live video.
Video KYC only requires a customer to upload identity proofs such as photograph, address proof, a cancelled cheque, PAN card and signatures on the platform.
Infrastructural challenges like internet connectivity and customer awareness may become a hurdle in implementing video KYC but it will ease the burden of digital wallet companies.
Earlier in Feb, RBI had given a six-month extension for full KYC for putting in place alternative systems of completing the KYC process.
Now onus lies with wallet operators to come up with an alternative convenient route for e-KYC within two months time.