Mobile wallets such as Paytm, Mobikwik, OlaMoney and AmazonPay may not work from Thursday if users have not updated their Know Your Customer, or KYC, details.
In a move to make financial systems safer, the Reserve Bank of India has made it mandatory for mobile wallets to get their users to update KYC details with government-issued identity proofs and also physically verify them, The Economic Times reported. The deadline to do so was February 28.
The Payments Council of India, an industry body, appealed to the central bank to allow users whose wallets do not exceed Rs 10,000 to operate without the full KYC, but the Reserve Bank turned down the plea saying all payment methods must abide by KYC rules as they are a part of the banking ecosystem.
The industry fears that the rule will discourage people from using mobile wallets, The Business Standard reported. “Customers see KYC as a point of friction, and need to be motivated to do digital transactions,” Sunil Kulkarni, an official from the Payments Council of India, told the newspaper. Most popular wallets are currently offering their customers cash-back schemes to motivate them to complete the KYC process.
How do you update KYC?
Most applications follow a similar process to update KYC, which includes providing the details of a government-issued identity proof and then verifying it in person.
The users can also visit certain outlets, which the apps list out, to update their KYC.