Prepaid payment instruments (PPIs) or mobile wallets were mandated by the banking regulator in October 2017 to capture all information required under the know-your-customer (KYC) guidelines by end February.
This KYC requirement is also a key cog in the RBI's push for interoperability. However, with the Supreme Court striking 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 reliable alternative, stakeholders are scrambling to meet the looming RBI deadline.
According to the Times of India, Amazon has started rolling out doorstep KYC services for its e-wallet users to meet the RBI deadline. In the past year, the ecommerce giant has put in significant capital towards scaling up Amazon Pay, its payments business, wooing customers through cashbacks and discounts, and bringing in a large number of merchants who were previously outside Amazon's ecosystem. For instance, Amazon Pay is now accepted on all popular food ordering apps and websites including Swiggy, Domino's and Freshmenu, as well as the likes of BookMyShow, Acko, the online-only insurance policy provider, and more.
But the smaller payment companies are reportedly struggling to meet the KYC directive without the convenience of the eKYC route. The buzz is that over than 95 per cent of the mobile wallets in the country could stop being operational by March.
Meanwhile, industry insiders point out that a large chunk of the wallets that were used for remittance have already moved to the business correspondent channels in the face of regulatory restrictions. 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 24x7 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 milestone in December.
Edited by Sushmita Agarwal