Most e-wallets may get invalid by February

Digital payments maybe staring at serious uncertainties owing to sector regulations. Lakhs of mobile wallets are set to become invalid by the end of February 2019, as these companies are struggling to comply with RBI (Reserve Bank of India) rules for user data verification or KYC. It is estimated that as high as 80% of transacting users are yet to comply with KYC.
The Supreme Court ruling that barred private entities from using Aadhaar has made it tougher for companies to do KYC.
While a partial KYC could previously be done on the basis of an OTP to the mobile number, now a full KYC needs to be done, which involves submission of various documents, including ID proof and address proof. For users, who largely use wallets for small payments, the hassle of completing the process has proven to be cumbersome. Many have moved to simpler products like Unified Payments Interface (UPI), which transfers money from one bank account to another directly, without the need to load a wallet. In December, UPI saw over 620 million transactions. In comparison, mobile wallets saw transaction volumes falling in November to under 350 million. The data is from RBI and National Payments Corporation of India (NPCI).
Wallets saw exponential growth in the immediate post demonetisation period, but the growth has slowed over time, with de-growth in the last month for which data is available.
The companies say the regulatory hurdles are contradictory to government campaigns to push digital payments. Digital wallets like Paytm, Amazon Pay and MobiKwik are preparing to lose a significant share of their transacting user base. But they are also hoping the regulator grants a feasible solution in time.



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Changes in Our Business Model
25th Sept 2020
Greetings from Moneylife Advisory Services
Between financial years 2019-21, SEBI has come up with extensive changes to investor advisor regulations. On Sep 23, 2020, SEBI had issued new additional guidelines. This comes just two months after extensive changes announced in July 2020. Earlier, in December 2019 there was an ad hoc circular
As a result of these changes, IAs, cannot accept fees through credit cards, will have to sign a 26-clause investor agreement, have to maintain physical record written & signed by client, telephone recording, emails, SMS messages and any other legally verifiable record for five years. IAs were already asked to record the suitability and rationale for every piece of advice given, sign them and store them for five years.
While these extensive and frequent changes, designed to strengthen the conduct of IAs are well-meaning, these have sharply increased compliance efforts and cost. We, being online advisors, find many of changes harder to implement, compared to advisors working in the physical space. We will have to have an army of advisors, administrative and tech staff to be compliant. If we do this, we will have to divert money to these areas and the cost of our service will double. We want to remain the least-cost service in the market to benefit more and more people. In the circumstances, we are forced to change our business model from “advisory” to “research”. This will mean the following:
What remains the same:
  • Recommendations on insurance, investment and Lion stocks, will continue as a part of the MAS premium subscription. Our strength has always been research and this will remain available to you through our recommendations.
  • The magazine and all textual content will remain as part of the service
  • We will have to suspend the restructuring tool.
What changes:
  • The interactions in Ask / Handholding will offer investment advice but not specific to your situation. It will offer information on investment products and also clarify your doubts about various financial products. It will be a forum for information, not for advice. This will be implemented with immediate effect and our guidelines in Ask, reflect this now.
Over the next few weeks our site and our communication to you will reflect these and other additional changes.
We feel this will not affect you much in terms of what really matters in investing: knowing what to buy and when to buy. This is our edge and it will still be available to you.
Debashis Basu