Users of popular cashless services like Paytm, Freecharge and PhonePe are baffled, because now, they are not accepting Aadhaar for KYC!
What is the real reason? We will soon share..
No Aadhaar For KYC? What Is Happening!
Ever since mobile wallets like Paytm, Freecharge and cashless services like PhonePe were introduced, it was the norm to complete KYC (Know Your Customer) norm using Aadhaar.
Even Govt. of India promoted, and encouraged this practice.
But now, these apps have stopped using Aadhaar for KYC, and asking for other sources of identification such as PAN Card, Voter Card, Passport etc.
Infact, this ‘trend’ started with Airtel, which was stopped by UIDAI to use their database for verifying users. This was done after UIDAI noticed several violations of this privilege by them.
Now, it seems that wallets and payment services too have stopped using Aadhaar for completing KYC of their customers.
Here is a screenshot from Paytm, when a new user decided to complete his KYC using Aadhaar:
Here are all the option shown by PhonePe to complete KYC:
We can clearly see that there is no more an Aadhaar option, which was so popular and widespread till now.
Freecharge too has removed Aadhaar option, as seen in this screenshot:
Now, the question is, what is the reason behind this?
(note here, that only new users of these wallets, who haven’t yet completed their KYC are being stopped from using Aadhaar for their KYC. Existing users are facing no such issues, as their KYCs are already done)
Why Are Wallets Not Using Aadhaar?
It seems that this is a decision taken by UIDAI, and not wallets.
Due to blatant misuse of Aadhaar database, UIDAI had earlier stopped all Aadhaar based payments via UPI and IMPS. UIDAI had taken action against websites, and payment services for misusing Aadhaar data.
Now, it seems that the same action is being taken against wallets as well, and they have stopped from accessing UIDAI database for completing KYC process of new customers.
If we talk about Paytm Payments Bank, then they have admitted that new customers’ KYC process is right now stopped.
They confirmed this via Tweet:
@_sahil022_ Hi, Currently we are not accepting any new KYC requests to open any Paytm Payments bank account. We regret the inconvenience caused. We will let you know Once the systems are up.Thanks!
— Paytm Bank Care (@paytmbankcare) September 4, 2018
Infact, RBI had earlier stopped Paytm Payments Bank from adding new customers, and hence, their inability to use Aadhaar is justified.
On the other hand PhonePe has informed that their license for using UIDAI database is still pending, hence they are not able to provide Aadhaar based KYC.
Interestingly, Aadhaar based KYC for MobiKwik is still functioning.
Digital India movement, and the inclusion of new users into the cashless mode can hit a roadblock, if Aadhaar is not used for KYC.