Mobile wallet firms have received a much-needed breather from Reserve Bank of India which has extended the deadline for full KYC by six months. Industry experts, on the other hand, cite a digital process of KYC process against the collection of hard copy documents.
Earlier Supreme Court placed a ban on AAdhaar based electronic KYC which forced the mobile wallet firms to adapt to paper-based KYC which is not only an expensive alternative but also brings with it the hassle of managing documents.
The RBI on Monday said that the extension will offer the wallet firms the much needed time to figure out an alternative process for completion of the KYC process.
“The extension opens up possibilities of alternative digital KYC mechanisms like QR code-based KYC or video KYC, which can make the customer verification process simpler,” says Sunil Kulkarni, joint MD of the mobile wallet service provider, Oxigen Services India.
“The mobile wallet industry is looking at the development of alternate KYC mechanisms within these six months so that entities can actually get the full KYC done in a cost-effective manner,” said Naveen Surya, Chairman of industry body Fintech Convergence Council.
Mobile wallet companies also hope that RBI would enable video KYC which will help in avoiding the paper-based KYC process.
“The whole process is cumbersome, not to mention the fact that paper documents with personal details of the customer can be misused by the agents for multiple purposes, which is a privacy breach,” warned another executive of a mobile wallet firm.
