RBI’s Launches New eWallets With No KYC; Transactions Upto Rs 10,000 Will Be Allowed
In order to boost Digital India, and facilitate more cashless transactions, Reserve Bank of India or RBI has now launched a new category of prepaid payment instrument (PPI), which will be semi-closed.
One big advantage which these types of semi-closed PPI (for example Paytm) will have is that, there will be no mandatory KYC conducted by the PPI provider, but a self-declaration is enough.
RBI’s New PPI Will Solve KYC Issue?
The new prepaid payment instruments or PPI launched by RBI will make the process the process of KYC extremely easy for the customers.
While launching these new PPI, RBI said, “To give impetus to small value digital payments and for enhanced user experience, it has been decided to introduce a new type of semi-closed PPI,”
The end-user will be able to create an account in these semi-closed eWallet by simply entering their mobile phone number, and then verify it via OTP.
Besides, the user will need to self-declare their name, and a unique ID number needs to be entered.
Besides this, there will be no requirement of any KYC process, and this is the gamechange move.
Transactions Upto Rs 10,000 Wil Be Allowed
These semi-closed eWallets will allow a monthly transaction of only Rs 10,000, and beyond this amount, these PPIs wont allow the user to top-up their wallets.
This means, that these new type of eWallets will be mainly used for low value daily transactions, which constitute upto 60% of the overall cashless transactions in India.
RBI said, “These PPIs shall be reloadable in nature and issued in card or electronic form. Loading/reloading shall be only from a bank account. The amount loaded in such PPIs during any month shall not exceed Rs 10,000 and the total amount loaded during the financial year shall not exceed Rs 1,20,000,”
Banks, as well as non-banking financial institutions, can issue these semi-closed PPIs to the end-users, once the basic requirements and details of the user is obtained.
Why This Can Be A Gamechanger Move
As observed by NPCI, and wallet companies, around 60% of the overall cashless transactions are actually below Rs 5000, and this means, that more and more Indians are using cashless mode of transactions such as wallets and debit/credit cards for low volume transactions.
A separate PPI instrument such as eWallet makes perfect sense for the same.
As there is mimimal KYC for this new PPI instrument, it is expected that KYC scams will stop as well.
We will keep you updated, as more details come in.