Users who haven’t completed their KYC can still load money onto their Paytm account by purchasing gift vouchers on the platform. The workaround, which is an effort to circumvent the RBI’s mandatory KYC rules, is far more limited compared to using the standard Paytm wallet though.
The gift vouchers which are issued by Paytm Payments Bank can be “used wherever Paytm is accepted (eg. Recharges, Bill Payments, Uber, Zomato, Shopping),” a disclaimer on the app informs. These gift vouchers are not transferable, so users won’t be able to use them to send money to others or even back to their own bank accounts. These gift vouchers also come with a one-year expiry date.
When users choose the ‘Add Money’ option on Paytm they will get a popup informing them that the amount will be added as a gift voucher and they will have to agree to its terms before continuing.
Last month, Paytm had temporarily tweaked how it accepts payments made from credit cards. Instead of allowing users to add money to their wallets directly from a credit card it converted funds added from credit cards into gift vouchers. This change had to be rolled back after the company faced some backlash on social media from confused customers. The new popup agreement seems to be an effort to avoid any such confusion this time.
Wallet balance is still usable but limited
The Reserve Bank of India has said that customers will not lose money from mobile wallets even if companies remain non-compliant to its full KYC (Know Your Customer) guidelines after the deadline expires. But usability of the wallet will be severely limited.
Reloading on the wallet and remittances can only resume after completing the KYC requirement. Users will be able to undertake transactions for purchases with the available balance in the wallet. So, you can still pay for your Uber rides and order food online with the balance amount left on your wallets even after the KYC deadline expires, but you can’t add any more money to it.
Those users who want to withdraw the balance amount (in the wallets) can close their PPI account and get the money transferred into their bank accounts.
KYC is having an impact on wallet companies
Mobile wallet companies have raised alarm that this move could seriously cripple them. According to a report on the Economic Times, the total number of customers who have submitted their KYC details is in ‘low single-digit’ percentage.
The report quotes the chief executive of a payments company speaking anonymously, “If these norms are implemented in full force, the entire industry, which handled around Rs 12,000 crore worth of transactions in December, will be facing a major crisis.”
The Payments Council of India (PCI), the representative body for digital payment players, as well as various other industry stakeholders, have spoken about how the full KYC requirements would possibly hamper mobile wallets.