Mobile wallet transactions fell sharply in March
The value of mobile wallet transactions fell from a peak of ₹13,100 cr in February to ₹10,000 cr in March and ₹11,695 cr in April, data shows
Mobile wallet transactions fell sharply in March as mandatory know-your-customer (KYC) requirements took effect, before clawing back somewhat in April.
Data from the Reserve Bank of India (RBI) shows mobile wallet transaction volume and value were substantially lower in March than in February, as companies struggled to come up with the necessary compliance infrastructure and convince users to provide the required documentation.
Data shows the value of mobile wallet transactions fell from a peak of Rs 13,100 crore in February to Rs 10,000 crore in March and Rs 11,695 crore in April. Volumes also tell a similar story. The number of mobile wallet transactions fell to 268.79 million in March from 310 million in February. It was 279.29 million in April.
The central bank directive that all wallet issuers follow strict KYC guidelines starting 1 March caused considerable disruption, as customers struggled to get their KYC done amid scarcity of adequate infrastructure from the wallet operators.
For all prepaid instruments over Rs 10,000, issuers were mandated to get full KYC of the customer. Even for full KYC, a monthly limit of Rs 1 lakh was placed.
In case only minimum KYC is done, customers cannot keep more than Rs 10,000 in the wallets.
They will not be able to send money to other wallets or bank accounts either. The remaining transactions of making online purchases, bill payments or bookings can be done with the existing money in the wallet. Minimum KYC PPIs account for over 90% of the PPI transaction volume.
The central bank did not accept the wallet industry’s plea to relax norms saying sufficient time was already given to them for compliance. It said all payment instruments must abide by the KYC norms as they are part of the extended banking ecosystem.
Sunil Kulkarni, joint managing director at Oxigen Services (India) Pvt. Ltd, an e-wallet and payment solutions company, said a significant proportion of PPI volume comprises remittances, which have been impacted adversely. But he attributed the marginal bounce-back in April to purchase transactions.
“Such transactions do not require full KYC and people can also avail of the benefits of cashback offers from e-commerce companies,” he said.
MobiKwik co-founder Upasana Taku said her company has managed to ensure that more than 50% of the users have become KYC-compliant, adding the impact of the KYC norms was minimal on the firm as it was an early starter on updating customer KYC.
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