Yesterday was the last date for submitting your KYC details to PPIs (prepaid payment instrument) such as Paytm, MobiKwik. These wallets were initially given time till December 31, 2017 to complete the KYC process, which was eventually extended to February 28, 1018. The RBI refused to stretch the deadline any further saying, "...sufficient time has already been given to meet the prescribed guidelines."
How to reactivate e-wallet?
Customers will be able to enjoy the full services of their mobile wallets once they fill in their Aadhaar details as part of the KYC process. The process for most e-wallets is almost the same: You open the app and type your registered mobile number. It'll send an OTP on it. Once you type the correct OTP, you can upload your Aadhaar details. In case of Paytm, people can either visit a nearest Paytm KYC centre or schedule a visit from a Paytm representative after uploading Aadhaar details on the app.
Customers sans KYC won't lose money
Customers who still haven't completed the KYC process and have money in their payment wallets do not need to panic as the RBI had said that the customers without KYC won't lose their money. Nevertheless, customers who have not completed the process will not be able to add money to their wallets and avail the entire range of features.
If you have cash stashed in any PPIs like Paytm, Ola Money, Google Tez, Sodexo, MobiKwik, Amazon Pay, but are yet to complete the KYC formalities, you will still be able to continue using your available balance for purchases post February 28. Alternatively, you could choose to close the PPI account and get the balance money transferred into your bank accounts.
However, if Paytm customers were trying to initiate the process yesterday, then it must be noted that the app was showing an 'error' message in the last hours before the deadline.
Wallet companies say process is 'challenging'
PPIs have been raising the issue for a while now that the KYC process is a challenging one and that this measure would only cost them their customers. There are currently 200-300 million wallet users in the country. Vijay Kalantri, founder of The Mobile Wallet, told The Hindu Business Line that PPI is the entry point for anyone to go digital but if so many restrictions are put in place then it will only create hindrance. He said that there should only be minimum KYC, which validates the name and mobile number for OTP purposes.
The RBI is pushing for this measure because it says that it will only strengthen safety and security of transactions and customer protection. As per the directions issued on the matter last October, the RBI wants to allow e-wallets of private firms to interoperate, which means that users of one wallet app will be able to transact with users of a different wallet app. "In the first phase, PPI issuers (both bank and non-bank entities) shall make all KYC-compliant PPIs issued in the form of wallets interoperable amongst themselves through Unified Payments Interface (UPI) within six months from the date of issue of this direction," said the RBI directive, adding that "In subsequent phases, interoperability shall be enabled between wallets and bank accounts through UPI. Similarly, interoperability for PPIs issued in the form of cards shall also be enabled in due course."
However, it still remains to be seen how this RBI directive is going to affect the business of wallets, as the need for it was pushed simply by the demonetization announcement. As it is, one player has already exited the game. Mumbai-based BookMyShow is reportedly discontinuing its wallet service.
(With PTI inputs)