Amendment no Aadhaar for mobile wallet firms
MUMBAI: The amendment to the Aadhaar Act passed by Parliament on Tuesday seems to have brought little respite for Paytm, Ola Money and PhonePe, mobile-wallet businesses that are weighed down by costs of verifying customers manually.
The latest Aadhaar amendment allows banks to open accounts using Aadhaar as a non-binding document for customer verification using UIDAI data repository. With the August 31RBI deadline for completing KYC of all customers fast approaching, these payment players are seeking further extension to comply with the mandate. “While RBI has extended the timeline for conversion of minimum KYC to full KYC until August 2019, we believe that this extension is inadequate for conversion of all minimum KYC customers to full KYC customers,” a spokesperson from Paytm Payments Bank told ET. While payment players can perform minimum KYC digital authentication through OTP from an Aadhaar-linked number, the RBI has given an 18-month deadline to all wallet companies to convert these minimum KYC to full KYC wallets, which includes a manual verification of the customer and storage of physical documents of identification proofs.
“Customers use wallets primarily for low-value transactions. These transactions are at risk of being transited to cash – as minimum KYC customers are not motivated sufficiently to undertake full KYC. This will severely impact GoI’s vision for a less cash society,” the spokesperson from Paytm Payments Bank said.
The high cost of logistics and setting up manual verification centres has hit these players hard as unlike banks, they don’t have physical infrastructure, especially in rural areas where customers may have originated accounts. “The cost for manual KYC for non-banks is anywhere between Rs 200 and Rs 250 per KYC. For players with huge customer volumes, these costs can be deterrent to their business and eat up on revenues,” said Wriju Ray, cofounder, IDfy, a digital KYC solution company.
“It requires to be seen whether the regulators would come up with a circular to clarify the amendment. Payment players started their operations without considering the additional costs to be incurred due to the ordinance on Aadhar for eKYC,” said Oscar Martins, MD financial services, Proviti Member Firm India.