In case you’ve not been following, today will be the last day to submit your KYC details to prepaid payment instrument (PPIs) like Paytm and Mobikwik. Despite requests to extend the deadline, the Reserve Bank of India has maintained that February 28 will be the last date for mandatory KYC -compliance by prepaid wallet customers.
There are around 55 non-banking PPIs and 50 wallets promoted by banks. Mobile payments services like Paytm, Mobikwik, Google Tez, Ola Money and Amazon Pay are some of the most popular PPIs that are required to receive you KYC details.
What is KYC and how to link your account
KYC (Know Your Customer) basically allows businesses to identify their customers via certain document proofs for example your Aadhaar number, passport, voter ID, driving license among others. Any one of these documents will allow businesses to verify your identity. The RBI is pushing for PPI-KYC linking to improve secure transactions. B.P. Kanungo, deputy governor of RBI, added that the KYC will also bring in inter-operability wherein users of one e-wallet will be able to transact with users of another e-wallet.
In order to complete the KYC formalities, you will need to access the PPI(s) that you use. Most wallets have been showing prompts to complete your KYC process. Some of them, like Paytm, are also offering some exclusive benefits such as access to Paytm Payments Bank, seamless fun transfer, cashbacks and some other offers. Once you provide your KYC detail, you will likely be asked to complete your verification by either carrying your original document to a nearby KYC Point or requesting an agent to visit you at your preferred address for verification. The process for other wallets should be along the same lines.
Will e-wallet customers lose their money?
With the deadline soon approaching, there have been concerns raised by e-wallet customers on whether their money kept in PPIs will be lost if they fail to provide their KYC detail in time. However, the RBI has assured that customers will not lose their money and will be able to make transactions with the remaining amount of money that has been stored in their PPIs. However, customers will need to complete the KYC requirement to load their wallets with money again.
“PPI (Pre-paid instrument) issuers not obtaining the KYC related inputs of their customers within the timeline, the customer will not lose their money, Kanungo said. Reloading of the PPI and remittances can resume after completing the KYC requirement.
What happens if you do not link your account?
After February 28, customers will not be able to load more money into their PPI unless they complete the KYC formalities. So you essentially have the choice to close your wallet account and transfer the remaining balance to your bank before February 28 or submit your KYC and continue using the app as usual. PPIs, in the meanwhile, have complained that KYC requirement is a tedious process and may result in losing business if customers refuse to provide more personal detail.
PPIs fear that the move will see a drop in the number of wallet users. BookMyShow, for example, has already thrown in the towel on its wallet service, My Wallet, and will soon discontinue the service. Companies like Paytm, which is primarily a wallet service, could be hit even harder. The RBI, however, maintains that KYC will add another level of security to digital payments, so customers will need to make that call soon.