New Delhi: Mobile wallet company executives last week expressed their concerns to Reserve Bank of India officials over the proposed guidelines for the sector, in their formal feedback to the regulator on them. RBI had issued draft guidelines for prepaid payment instrument (PPI) licence holders in March and several had flagged issues such as know your customer (KYC) norms.
“Some clarifications were sought on certain clauses, while PPIs discussed issues around KYC, especially since it could be overkill for small transactions,” said one of those at the meeting.
The central bank stayed firm on the matter, said people with knowledge of the matter. There was no response to email sent to RBI, while spokespersons for the Payment Council of India and the Internet and Mobile Association of India (IAMAI), which organised the meeting, did not wish to comment.
Currently, e-wallets and other such prepaid payment instruments can only hold up to Rs 20,000 per user with minimum KYC. As per the draft guidelines, these PPIs will have to move to full KYC details within 60 days of the PPI licence being issued.
Existing semi-closed PPIs that currently require minimum details from customers have to convert into full-KYC PPIs by June 30, failing which the RBI warned that no further credit will be allowed in such PPIs.
“In the feedback given to RBI, the main request is that minimum KYC be retained or that the deadline for implementing full KYC be extended to 18-24 months, since by then telecom companies would have done Aadhaar linking of mobile numbers. That will help mobile wallets do full KYC for all customers,” one industry member said. “The other ask is that RBI should publish the interoperability guidelines for wallets.”
KYC norms will increase customer acquisition costs and make a simple process complicated, the companies have said.
They have also objected to additional authentication factors, higher net-worth requirements and the need for wallets partnering with ecommerce platforms and payment gateways to get a list of merchants from them.
Some of these concerns, especially full KYC compliance, were raised at the meeting, according to those present.The meeting was organised by the Payment Council of India, a lobby group of about 60 companies in the digital payment space established under the IAMAI.
The Payment Council of India was to give its formal feedback to the regulator by April 15, said one of the people cited above.
ET was the first to report on RBI’s plans for guidelines aimed at moving wallets toward interoperability and providing them access to platforms such as the unified payment interface (UPI). ET had also reported on the worries raised by wallet companies over the proposed rules.
PPIs are currently seeing monthly transactions of Rs 6,000 crore, of which about Rs 4,000 crore is from money transfers while corporate solutions such as smart cards for expense management constitute about Rs 500 crore, according to people with knowledge of the matter. E-commerce giant Amazon recently received a wallet licence from RBI.