E-wallet payments fell sharply in March
NEWDELHI: Mobile wallet transactions fell sharply in March as mandatory know-your-customer (KYC) requirements took effect, before clawing back somewhat in April.
Data from the Reserve Bank of India (RBI) shows mobile wallet transaction volume and value were substantially lower in March than in February, as companies struggled to come up with the necessary compliance infrastructure and convince users to provide the required documentation.
Data shows the value of mobile wallet transactions fell from a peak of ₹13,100 crore in February to ₹10,000 crore in March and ₹11,695 crore in April. Volumes also tell a similar story. The number of mobile wallet transactions fell to 268.79 million in March from 310 million in February. It was 279.29 million in April.
The central bank directive that all wallet issuers follow strict KYC guidelines starting 1 March caused considerable disruption, as customers struggled to get their KYC done amid scarcity of adequate infrastructure from the wallet operators.
For all prepaid instruments over ₹10,000, issuers were mandated to get full KYC of the customer. Even for full KYC, a monthly limit of ₹1 lakh was placed.
In case only minimum KYC is done, customers cannot keep more than ₹10,000 in the wallets.
They will not be able to send money to other wallets or bank accounts either. The remaining transactions of making online purchases, bill payments or bookings can be done with the existing money in the wallet. Minimum KYC PPIs account for over 90% of the PPI transaction volume.
The central bank did not accept the wallet industry’s plea to relax norms saying sufficient time was already given to them for compliance. It said all payment instruments must abide by the KYC norms as they are part of the extended banking ecosystem.