If you are using a digital wallet like Paytm, PhonePe etc, you will soon have to provide valid KYC details as per RBI policy. The current deadline is 28th February 2018, after which there will be a restriction on your transactions. We cannot blame the wallet providers since they have to comply with RBI’s KYC norms introduced back in October 2017. So to deal with it, you will have to complete the KYC using the methods given by the wallet providers. Let us find out more about the digital wallet types, imposed restrictions and how to remove the same.
These digital wallets are otherwise known as Prepaid Payment Instruments (PPI) in banking terms. As per RBI regulations, they are of three types viz closed PPI, semi-closed PPI, and open PPI.
As per RBI, you need to perform either minimum KYC or full KYC for availing the services provided by semi-closed and open PPIs. A minimum KYC is possible by submitting an officially valid document (OVD) listed under Prevention of Money Laundering rules 2005.
Whereas a full KYC requires you to link your Aadhaar with the PPI account. The full KYC process can be done using PPI’s app or website and KYC centre. Most of the PPI’s allows you to perform e-KYC with Aadhaar authentication, which can be done within seconds.
Many of the PPI providers have simplified the KYC process by integrating the Aadhaar based e-KYC authentication. This can be done from the PPI’s biometric device with the help of their KYC agent or with the PPI app via Aadhaar OTP authentication. However, for OTP based e-KYC, an aadhaar registered mobile number is required.
A similar procedure is also possible for open PPI ie savings bank accounts. For the biometric method, if the provider fails to arrange a KYC agent, you might need to visit the KYC centre personally to complete the procedure. Any semi-closed PPI linked to a KYC verified open PPI will also be auto verified.
Based on the type of verification completed, your wallet operations will have the following functionalities. If you choose to provide no OVD’s, then your wallet will have severe restrictions that make it almost unusable.
That was all about the KYC verification of digital wallets aka eWallets. Nowadays, people open wallet accounts randomly for availing introductory offers or benefits. After the implementation of the strict KYC norms by RBI, the wallet providers are going to have a hard time and eventually a crisis. So it is better to choose a few based on your requirements and ignore the rest. Some of the popular wallet providers are Amazon Pay, Paytm, PhonePe, Freecharge, and Vodafone mPesa. Hope the article was informative, Peace!