Mobile wallets have to comply with February-end KYC deadline, says RBI

RBI said the KYC was designed to strengthen safety and security of transactions and customer protection

The Reserve Bank of India (RBI) on Monday said prepaid payment instrument (PPI) issuers or mobile wallets would have to comply with the know your customer (KYC) guidelines by February 28. 

Customers will not lose balance in mobile wallets, even if they do not meet the KYC requirements, said the central bank.  The existing wallet accounts will be operational after the deadline. 

“Reloading PPI and remittances can resume only after completing the KYC requirements,” said RBI’s Deputy Governor B P Kanungo at a press meeting. 

There are 55 non-bank PPI issuers, said the central bank. Most major banks also have a PPI. 

The updated list of payment system operators, which includes PPI, comprised 91 entities, according to the RBI publication of February 2018.  The RBI’s announcement made full KYC mandatory for all transactions, regardless of value. 

The Payments Council of India(PCI), the representative body of PPI players, has said this order will hamper the wallet market.  Earlier this month, members of the PCI had requested the RBI to waive off the full KYC requirements for transactions below Rs 10,000.

The central bank, however, said KYC was designed to “strengthen safety and security of transactions and customer protection”.  The RBI said it was necessary to pave the way for interoperability between PPIs, bank accounts, and cards in a phased manner. 

The first phase, to be introduced before April, will involve interoperability between wallets.