regulations coming into force is not as big as touted by mobile wallet companies. However, this doesn’t mean that all is well with these firms as their business models are changing rapidly in the light of competition from Unified Payments Interface and Aadhaar-based payments. Mobile wallet companies are now branding themselves as fintech firms as they enter spaces like lending, mutual funds and wealth management,
In its master directions for prepaid instruments, the Reserve Bank of India had mandated full KYC
for all mobile wallet users while placing a limit of Rs 10,000 per wallet as the allowed transaction amount on basic KYC
including name, e-mail and mobile number. For this, mobile wallets
were allowed to use Aadhaar-based e-KYC to get the job done quickly and at a cheaper rate. However, these wallets are required to furnish paper KYC in a year of registering customers through the electronic medium.
Mobile wallet companies had decried this move by claiming that two KYC for the same customer increases their cost. Additionally, they faced issues in enrolling people for Aadhaar-based e-KYC in the first place amid the confusion related to the ongoing Supreme Court case on the identity project. As Aadhaar-based authentication service access was revoked for certain private players, industry officials said that e-KYC has been completed for only 10 per cent of the total mobile wallet customers.
A senior executive from a mobile wallet company said that these drop numbers do mark a decline and a possible reason for the numbers not being as low as expected is an excessive weight of a couple of big players in the market.
“There are the likes of Paytm
in the business which are said to have more than half of the market share by conservative estimates. So, if they were able to retain a bulk of their customers like Paytm
did by moving them to the payments bank, then the overall figures are likely to look big too,” the senior executive, on condition of anonymity, said.
The person quoted above added further that smaller wallets have seen a bigger hit on their business and that’s likely to continue since they don’t have easy access to capital which can allow them to deploy on-ground KYC personnel like certain firms did.
At the same time, UPI transactions continued to spike as it crossed Rs 191-billion mark in the month of February which is close to double the volumes recorded by all mobile wallets