This move is in line with Paytm's goal of bringing Indians into the fold of the mainstream economy.
Regulated entities like banks and wallet providers are required to carry out certain customer identification procedures while establishing account-based relationships and undertaking transactions.
These procedures constitute KYC (Know Your Customer) process of customer verification and help identity theft, financial fraud, money laundering and terrorist financing.
A typical paper KYC process involves verifying the customer's original documents of proof of identity and proof of address in person, filling up of forms, attaching latest photograph and copies of identity and address proof, verification of details, data entry into customer information management systems and archival of all the paper documents.
The process is fraught with operational challenges in managing the physical documents, often takes several days for verification to be completed and is prone to fraud as documents can be easily forged.
Paytm's Aadhaar based eKYC is entirely paperless, instant and secure. Customer's identity is verified instantly on the basis matching biometric scan of fingerprint or IRIS against Aadhaar database.
When a customer requests to upgrade their Paytm account, they can either choose to visit the closest Paytm centre near them or request a visit from a Paytm agent at their preferred address.
Upon arrival, Paytm's agent carries out a quick and easy eKYC process using mobile-based biometric scanner. Customer's consent is also captured using Aadhaar based eSign, ensuring that the entire process is completely paperless.
The process is also extremely secure since biometric details are used to verify identity thereby reducing the possibility of fake/forged accounts.
Nandan Nilekani, Infosys co-founder and former Chairman of UIDAI said 'Delighted that Paytm is making a huge commitment to Aadhaar eKYC and the India Stack. The presence less, paperless and cashless era is coming soon to the smartphone in your hand!'
Viay Shekhar Sharma, Founder & CEO - Paytm said, "We are building India's largest eKYC customer network to bring half a billion Indians to the mainstream economy. We have aggressive targets to become the largest aadhar-based eKYC company in the country."
Paytm has constituted a rich network of partners, agents, kiosks, and technological solutions to offer its consumers unmatched flexibility and convenience. With over a billion Aadhaar cards already issued, Paytm believes that eKYC is key to realizing their goal of bringing 500 million Indians to the mainstream economy.