Ease out the KYC norms; demand comes from digital payment industry

Ease out the KYC norms; demand comes from digital payment industry

New Delhi: The e-Payment industry has raised the demand to ease out the KYC (Know Your Customer) norms. In a letter written to the apex bank of India, the digital payment industry has asked to delay implementation of its stringent customer verification rules until mobile wallet providers are allowed to access the Aadhaar database for user authentication.

The letter written to the Reserve Bank of India (RBI) by Payments Council of India (PCI) read, “The (prepaid payments instrument) industry is in a precarious situation right now and therefore we request you to keep the KYC (know-your-customer) regulations in abeyance till the time these concerns are resolved.”

It was also said by the PCI that payment companies would be committed to the KYC guidelines as soon as they receive global authentication agency (AUA) licences. With this license, they will be enabled to authenticate customers using Aadhaar.

As of now, the RBI has not disclosed about its plans to resolve the demands of the industry.

MobiKwik, EbixCash and Oxigen Services, which are registered as authentication agencies, have been dropped into a ‘Local AUA’ list that prohibits them from storing data, as per a notification of the Unique Identification Authority of India, which issues digital Aadhaar numbers to Indian residents. The move also means payment companies can only ask users for their virtual Aadhaar numbers for authentication.

The letter of PCI to RBI read, “The PPI industry is in a unique situation where on one hand issuers have been mandated to perform Aadhaar-based KYC and on the other, they are being denied the requisite licence to do so.”

It has also sought for UIDAI to expedite the AUA licensing process for Amazon Pay, PhonePe, Balance Hero, Sodexo, PayPoint and ZipCash.

RBI’s full KYC rules for mobile wallet came into effect on March 1. “Even cooperative banks and regional rural banks have been included in the list of entities that have been given access and permission to store data… there are a few cooperative banks with a single branch in a single district while we have pan-India presence, still this discrepancy,” said a senior executive with a payment company that holds an AUA licence.

UIDAI, in a recent notification, said companies that did not have ‘enough justification’ to access the Aadhaar details of their users would be put in a ‘Local AUA’ list.

Further, industry insiders said that in the wake of the Supreme Court’s observations on privacy concerns around Aadhaar, UIDAI has been delaying granting licences for fresh applicants.