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With the proliferation of smartphones, tablets and mobile internet the global market for Mobile Wallet is forecasted to grow more rapidly in the coming days. According to analysts, mobile wallets will further be the single biggest transformation in payment processing if they continue to evolve at such rate.
Having said that, a top official of Paytm Payments Bank has said that mobile wallets will become strong players in the financial ecosystem. Renu Satti, Paytm Payments Bank MD-CEO has stated that the RBI guidelines released this month will enable mobile wallets to gain access to more functionalities like unlimited transfer of funds between a bank account and a wallet and higher limit of up to Rs 1 lakh for money transfer to beneficiary accounts.
She also added that as part of Paytm Payments Bank, customers get the convenience of wallets and can earn interest on their deposits by transferring money from the wallet to their payments bank account. This move will further strengthen the value proposition of mobile wallets and make them stronger players in the financial ecosystem. Paytm currently has over 270 million registered wallet users.
However, there is one concern though. The mandate to undertake KYC of customers could be a challenge as mobile wallet companies will have to make additional investments in the diligence process. Basically, the KYC (Know Your Customer) process allows banks and other institutions to obtain and verify information about customers' identity and address.
As per the new norms, mobile wallets that were conforming to a minimum KYC format (like verification of mobile number) will have to get full KYC of customers done within 12 months of setting up the wallet. Paytm has already said it plans to invest $500 million towards the KYC exercise over the next three years. Satti has also commented that while the process may seem time-consuming, it will also help prevent identity theft, fraud, and money laundering and ensure customers' money is safer than ever before.
"The new RBI guidelines would bring greater confluence and power to m-wallets. It will also ensure money transfers are simpler and financial systems are safer," she added.
Meanwhile, Paytm has already introduced a 'Nearby KYC Points' section in its app that directs users to nearby partner shops and locations where customers can get Aadhaar biometric KYC done for their Paytm wallets.