Payments company Paytm has revealed that more than 100 million of its wallet customers have completed their know-your-customer (KYC) process, as mandated by the Reserve Bank of India. To put this number in context, as of November 2017 Paytm had 282 million registered users. This means that slightly more than a third (around 35.7%) of Paytm users have fully operational wallets with KYC at the moment.
In a blog announcing the milestone, the company indicated the 100 million number included both minimum and complete KYC. Minimum or limited KYC does not require verification and can be completed by simply submitting details of one’s Aadhaar, passport, driving license among other documents. Minimum KYC accounts cannot conduct peer-to-peer transactions, are limited to a wallet balance of Rs 10,000 and are valid for 1 year.
Paytm hasn’t shared exact details regarding how many users have completed the full KYC requirements. But examining UIDAI’s eKYC dashboard can give us some indication. Till date, One97 Communication Limited, Paytm’s parent company, has completed 92.2 million KYC transactions. Paytm Payments Bank has around 31.4 million KYC transactions, a full KYC user is often prompted to convert their wallet account to a payments bank account. These numbers show that at least 7.8 million users used ids other than the Aadhaar to complete their KYC.
Mandatory KYC for wallets
As per orders issued by the Reserve Bank of India, February 28, 2018, was the last day for mandatory Know Your Customer (KYC) compliance by wallet customers. Going forward all non-KYC complaint wallet accounts will have very limited usability. The Reserve Bank of India had 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.
Decline in wallet usage
We had reported last month that the RBI’s KYC mandate caused a steep decline in mobile wallet usage, with transactions dropping by nearly half in one week after the compliance deadline.
Harshil Mathur, the co-founder of digital payments platform Razorpay had told Medianama, “In the first two weeks of March we have seen wallet transactions drop by almost 40-45%.” Mathur expected the volume of transactions to go down even further, “A lot of the spending in the last week has been from people using up their existing wallet balances to make purchases. But once those balances dry up, there will be even fewer instances of people making transactions.” Note that KYC non-compliant users can no longer add money to their wallets.