Even after multiple extension in KYC deadline for e-wallets by RBI, digital payments players have been demanding minimum KYC rule to be implemented for e-wallet as well as peer-to-peer transactions.
Among them, Paytm has the highest market share and responsibility of handling over 370 million total users including 100 million without KYC verification on the platform.
Now, the digital payments major has reportedly made representations to the RBI and discussed the issue with the Nandan Nilekani-led Committee to allow minimum KYC wallets to remain operational even after the banking regulator’s deadline i.e. August 31.
The definition for minimum KYC wallets is still the same since its inception. Under this rule, a customer’s mobile number gets authenticated with one government identification number, without cross checks.
So the challenge for Paytm is also the same – to move minimum KYC wallets to full KYC. Apart from time-consuming, the process will affect Paytm’s own wallet too. This will give an additional burden of Rs 2,500 crore on the company to do physical KYC for 10 crore (or 100 million) customers.
For the uninitiated, a full KYC rule states that a customer has to upload two documents on their app – A government issued address proof such as Driving license/Passport/Voter card and the PAN card. And then an in-person verification is to be done to verify the original documents.
Currently, Paytm claims that it costs around Rs 260 to Rs 270 per customer to do physical verification.
Meanwhile, digital wallets operators have received some relief from the finance ministry. The government had allowed non-banking entities to access the Aadhaar database for e-KYC authentication but only after their applications are vetted by the central bank, UIDAI and the central government.
While Paytm’s attempt to allow minimum KYC rule will be welcomed by other players in this space, the government’s instance on this will be awaited.