Digital wallet firms might be looking at the end of the path as the RBI’s (Reserve Bank of India) February-end time limit comes for them to fulfill complete KYC (know your customer) rules for all their consumers.
The total amount of users who have given their KYC data is in “low single-digit” number, as per executives of the industry. “If these rules are executed in complete force, the complete market, which controlled transactions worth of almost Rs 12,000 Crore in December, will be encountering a huge crisis,” claimed the chief executive of a transaction firm to the media in an interview. He spoke on condition of secrecy since his company is in discussions with RBI to unwind the needs.
In October, RBI rolled out harder KYC rules for prepaid payments instruments or digital wallets making the refreshed rules obligatory for semi-closed wallets as well in which consumers cannot keep over Rs 10,000 each month. Wallet operators not obeying with the needs within 1 Year might encounter severe operational limitations, it claimed.
While Payments Council of India, the industry body, has asked RBI to look into the problems grasping the market, there is barely any factor to think the controller may review imposition of its complete KYC need, claim industry analysts. This week, RBI met with representatives of industry and heard out their complaints associated to the refreshed guidelines of PPI.
Executives at various payment firms claimed that while the digital wallet segment has been increasing sturdily, RBI needs them to elevate use cases such as peer-to-peer transactions and offline payments. The market is mainly boosted by local remittances business, which has the biggest stake of digital wallet payment in the country. RBI data display that out of 288 Million mobile wallet payments posted in December, only 99 Million were towards transaction for services as well as goods.