How RBIs Proposed Guiedlines are a matter of concern for PayTM and other online wallet companies


After the demonetization move by the Prime Minister of India, Mr. Narendra Modi, the companies which benefitted the most were the mobile wallet companies. These companies enabled people to go on with their day to day life by enabling cashless transactions in a time when there was a huge cash shortage. However, recently the mobile wallet companies including PayTM expressed their concerns to the RBI officials, over the proposed guidelines for the sector.

Recently, the eCommerce giant Amazon also received its PPI license from RBI.

New Guidelines Issued by RBI

Recently, in March’ 2017 issued the draft guide for the PPI (Prepaid Payment Instrument) license holders and in response to these guidelines, many flagged different issues including KYC (Know our Customers) norms.

Currently, the e-wallets  such as PayTM could only hold up to INR 20,000 per user with its minimum KYC.  According to the draft guidelines, these PPIs would have to move to the complete KYC details within a period of 60 days of the issue of the PPI license.

The existing semi-closed PPIs which can currently be completed with the minimum details from the customers are required to convert into the full-KYC PPIs by 30th June’ 2017. If the e-wallet companies to fail in doing it by the given deadline, the RBI warned that, it will not allow any further credit in such PPIs.

Feedback Given By Mobile Wallet Firms Over the New Regulations

As per the feedback which has been given to the RBI, the prime request is that either retain the minimum KYC or the deadline issued in the conversion should be changed, and extended to 18 – 24 months, as the telecom companies, by that time, would have done the linking of the mobile numbers with the Aadhar card of the people. The Aadhar linking will help the mobile wallet firms to do the full KYC for all its customers.

Another thing that the e-wallet companies have asked the RBI to do is publishing the interoperability guidelines for all the wallets.

As per the representatives of the e-wallet companies, the new KYC norms will increase the customer acquisition costs significantly, and would make a simple process highly complicated.

Currently the PPIs are performing the monthly transactions of up to 6000 Crores, and out of this amount, the 4000 Crores comes from the direct money transfers. If the new regulations are applied, the companies are worried that their monthly transactions might suffer.