Following the Supreme Court verdict restricting Aadhaar usage by private entities, financial technology players including Amazon and Paytm are setting up physical infrastructure on their own to provide know-your-customer (KYC) services for users, according to the Economic Times.
Paytm put a number of executives on-ground to nudge users to complete their KYC process after the verdict. Amazon is reported to be rolling out doorstep KYC services for its e-wallet users.
Physical verification involves submitting physical documents and having people verifying the authenticity of the documents. The Aadhaar option costs a fraction of physical verification, but is not available anymore because of the Supreme Court verdict.
The RBI (Reserve Bank of India) has mandated that e-wallets, or prepaid payment instruments (PPIs) collect all verification related information of users by February. This has put additional pressure on these players, and explains Amazon’s infrastructure building process.
Those like Flipkart’s PhonePe who chose the UPI (United Payment Interface) option do not have this problem. In UPI, one is sending money from one bank account to another directly. Those accounts’ KYCs are done by the respective banks.