You need to do full KYC for mobile wallets too – but you can store twice the amount of money

You need to do full KYC for mobile wallets too – but you can store twice the amount of money
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  • The new changes will affect companies like Paytm, PhonePe, Mobikwik, and Google Pay among others.
  • These mobile wallet operators had certain leeway with KYC whereas banks had to meet full KYC requirements.
  • To cushion the need for new compliance, the RBI has also doubled the amount of money that can be stored in these wallets to ₹2 lakh.
  • The RBI had earlier in October 2018 announced that KYC and interoperability will be voluntary for PPIs.
  • Check out the latest news and updates on Business Insider.
Reserve Bank of India governor Shaktikanta Das today said that prepaid mobile wallet operators like Paytm, PhonePe, Mobikwik, and Google Pay among others will also need to implement full KYC (Know Your Customer) process soon.

KYC guidelines are mandatory mobile companies and financial services companies to identify and verify their customers, which is done at the time of opening an account and repeated at regular intervals. Currently, mobile wallets had some leeway, whereas similar products issued by banks had to meet all the KYC norms.

The RBI had earlier in October 2018 announced that KYC and interoperability will be voluntary for prepaid payment instruments (PPIs) such as cards, wallets etc. This has been made mandatory now. “As migration towards interoperability has not been significant, it is now proposed to make interoperability mandatory for full payment acceptance infrastructure. To incentivise migration of PPIs to full KYC it is proposed to increase the current outstanding balance from ₹1 lakh to ₹2 lakh,” said Das.

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The apex bank’s statement said that the move was being brought in ‘to promote optimal utilisation of payment instruments, and given the constraint of scarce acceptance infrastructure (like PoS devices, ATMs, QR codes, bill-payment touch points, etc.)’.

The new KYC norms for mobile wallets will not kick off immediately. The central bank said that detailed instructions for the same would be released soon.

Additionally, the RBI has also put forth another benefit for non-bank PPIs. "As a confidence-boosting measure, it is proposed to allow the facility of cash withdrawal, subject to a limit, for full-KYC PPIs of non-bank PPI issuers as well," said the statement from RBI.

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With this, wallets like that of Paytm, Mobikwik can be used to withdraw cash from ATMs. Earlier, banking PPIs like Yono app from SBI had this facility.

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