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RBI extends full KYC deadline for e-wallets

02/11/2019by adm0

Rachel Chitra

  • The extension will benefit prepaid and e-wallet issuers like Paytm, MobiKwik, Airtel Money, Amazon Pay, Ola Money and PayU
  • If the RBI had not extended the deadline, millions of Indian users would have on September 1 found restrictions or complete blockage of their mobile wallet apps

BENGALURU: The RBI has again extended – by six months – the deadline for prepaid instruments (PPIs), including digital wallets, to do full KYC of customers. The extension, which was announced a day before the deadline expired, will benefit prepaid and e-wallet issuers like Paytm, MobiKwik, Airtel Money, Amazon Pay, Ola Money and PayU.

If the RBI had not extended the deadline, millions of Indian users would have on September 1 found restrictions or complete blockage of their mobile wallet apps. For conversion to full KYC from minimum details, e-wallets were supposed to get users’ KYC completed by August 31. Fintech players were supposed to give users a one-time option to transfer their outstanding e-wallet balance to their respective bank accounts, if users failed to meet the deadline for providing required information.

The extension has come as a relief for the players in the e-wallet business. Mahendra Nerurkar, co-chair of PPI committee and CEO, Amazon Pay, said, “We hope the government will soon come out with clarity on e-KYC via Aadhaar or any other remote fully non-face-to-face digital KYC method to enable PPI industry players to perform this conversion effectively.”

The earlier deadline was February 1, but the RBI extended it after hearing a series of appeals from fintech companies. E-wallet players suffered a setback after an SC directive on Aadhaar prohibited its usage by private players for e-KYC. This forced digital wallet companies, which had obtained Aadhaar data from customers, to re-verify all those users physically. For e-wallets, the biggest hardship with compliance has been physical verification of the users’ documents, which can be painstaking and arduous.

In this transitionary phase, e-wallets like Freecharge and Amazon Pay were not allowing users, who had not completed KYC, to add money or withdraw from the e-wallet – though they permitted users to utilise existing balance for merchant transactions.

Relief for offline UPI transactions

The National Payments Corporation of India (NPCI) has waived merchant fees for offline Unified Payments Interface (UPI) transactions of up to Rs 100 made using QR code scan-and-pay. Also, for large transactions, merchant fees have been capped at Rs 100. For other transactions, the merchant discount rate (MDR) has been hiked to 0.30% (maximum Rs 100). At present, it is 0.25% for transactions up to Rs 2,000. It will be 0.65% for transactions above Rs 2,000.

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