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PhonePe, Paytm, Amazon Pay and other mobile wallets users are expected to face problems very soon as most of these e-wallets may become non-operational by March 2019.
According to payment industry executives, companies will be unable to meet the central bank’s deadline to complete verification of all customers by the end of February 2019.
Speaking to media a senior executive with a New Delhi-based payments company said: “More than 95 per cent of the mobile wallets in the country could stop being operational by March.”
"The banking regulator has not given any clear-cut guidelines about the alternative KYC procedures that they plan to approve. The deadline is just a few weeks away and we cannot adhere to (it) with this rate of progress” he added.
In October 2017, the apex bank had issued guidelines asking prepaid payment instruments (PPIs) or mobile wallets to gather all information required under the KYC norms.
Companies to date have been able to validate just a part of their total user base, and are yet to complete biometric or physical authentication of the majority of customers, the report mentioned citing industry executives.
The report also highlighted that there have been talks about alternative KYC method such as using video-based authentication or XML-based KYC, but none of these procedures has been formally okayed by the central bank.
An another payment executive said, “We are waiting till January 8, that is the last day of the winter session of Parliament; let us see what happens to the Aadhaar Bill. We will reach out to RBI and ask for the next course of action.”
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Ealier, the central bank directed wallets to become fully KYC compliant payment instruments in 2017, companies like PhonePe, Amazon Pay and Paytm began asking customers for identification documents.
Paytm, which had received a banking licence, went all out to use biometric dongles and field agents to convert its existing wallets into full KYC ones and to also open bank accounts.
A company executive estimates that Paytm has managed to convert 70% of its user base into full KYC ones.