Mobile Wallets Sink Due to New KYC Norms

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Startup News- Entrepreneurs of India

The latest Know-Your-Customer (KYC) norms of RBI have deeply impacted the mobile wallets of the country. Various reports suggested there has been a massive fall in the number of wallet users since RBI introduced the latest KYC norms.

Moreover, cash transactions have come back to the system as there are security concerns over digital transactions. Various industry sources pegged the fall in total number of people using wallets at 80% to 90%, with customer authentication failing to take off.

Amazon India, which routes a large chunk of refunds and incentivises ecommerce transactions through its Amazon Pay wallet has seen a sharp reduction in cash loading into the wallet.

“Cash loads have reduced by 95%. This will mean lower digital payment adoption in the long run, especially as we expand further into smaller cities and towns. We are losing an opportunity to engage customers who typically do not use electronic instruments,” said an Amazon India spokesperson.

Customers are not ready to load their wallets as they should complete full KYC verification to use them for transactions. So most of them reverted to cash on delivery.  

The RBI said last year that mobile wallet companies need to collect full authentication documents for customers and verify them physically to continue operating such accounts. This decision dissuaded many wallet users.

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