Know Your Customer (KYC) regulations imposed on mobile wallet providers in India have led to a decline in usage as consumers are reluctant to submit the required information, The Economic Times (ET) reported.
Sources spoken to by the newspaper estimated significant declines in mobile and digital wallet usage due to the regulations, which began being rolled out at the end of February after being unveiled by The Reserve Bank of India (RBI) in October 2017.
Under the new rules, designed to prevent fraud and money laundering, mobile wallet providers must collect a similar level of identification data on customers as mainstream banks. Accounts without the required level of information will be subject to strict transaction limits and balance restrictions.
Official figures for mobile wallet usage in the last two months have not been released, however executives quoted by ET tipped a fall, adding the number of users submitting the full level of KYC documentation between “low single digits” and 15 per cent.
One company told the newspaper 40 per cent of its users had provided “some documents” but did not divulge how many of these had given enough detail to comply with the new rules.
RBI rules on customer data are part of a number of regulations tightening rules on the large number of companies offering mobile and digital wallet services in India. The rules are being slowly rolled out throughout 2018.