The RBI directed all Prepaid Payment Instruments to Complete Customer KYC.

Amazon starts physical KYC confirmation of e-wallet users.
The RBI directed all Prepaid Payment Instruments to Complete Customer KYC.

The RBI has directed all prepaid payment instruments to complete customer KYC necessities before end-February and in the deficiency of dependable digital alternatives, players are reverting to paper-based KYC.

Prepaid payment instruments (PPIs) or mobile wallets were mandated by the banking controller in October 2017 to capture all information required under the know-your-customer (KYC) strategy by end February.

This KYC obligation is also a key cog in the RBI's shove for interoperability. However, with the Supreme Court outstanding down Section 57 of the Aadhaar Act in October – thereby nullifying the biometric e-KYC model used by telecom companies and banks for customer verification and onboarding – and the authorities yet to zero in on a dependable alternative, stakeholders are scrambling to meet the looming RBI deadline.

The biggies in the fintech and e-commerce break like Paytm and Amazon have supposedly deploy boots on the ground to get customers to complete the KYC official procedure. But the older, paper-based customer verification instrument is more cumbersome as well as more luxurious than biometric KYC. That's because physical verification involves physical documents, which then require people to verify their genuineness.

Amazon has started rolling out doorstep KYC services for its e-wallet users to meet the RBI target. In the past year, the e-commerce giant has put in important capital towards scaling up Amazon Pay, its payments business, wooing customers through cash backs and discounts, and bringing in a large number of merchants who were beforehand outside Amazon's ecosystem. For instance, Amazon Pay is now conventional on all popular food ordering apps and websites including Swiggy, Domino's and Fresh menu, as well as the likes of Book My Show, Acko, the online-only insurance policy provider, and more.

But the smaller payment company is supposedly stressed to meet the KYC directive without the expediency of the eKYC route. The buzz is that over than 95 per cent of the mobile wallets in the country could stop being prepared by March.

Meanwhile, industry insiders point out that a large chunk of the wallets that were used for allowance has already moved to the business journalist channels in the face of regulatory limitations. For example, the likes of MobiKwik and PhonePe are either focusing on Unified Payments Interface (UPI) business or have diverged into other fintech activities.

 UPI's biggest strength is its design, allowing 24×7 money transfer from one bank to another. Hence, the KYC requirement is completed by the respective banks.

No wonder, in just two years of launch, the value of UPI transactions managed to cross the Rs 1 lakh crore milestones in December.

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