Despite demonetisation, cash still remains the primary means of payments India, as evident from the cash crunch that is currently brewing in the country. Along the sidelines, it seems that transactions of mobile wallets have dropped significantly due to stricter KYC norms that the RBI instituted last October.
As per industry estimates, the fall, in terms of the number of digital wallet users, has been somewhere around 80% to 90% and is largely the result of most customers shying away from full KYC authentication.
Notably, the completion of the KYC involves linking of Aadhaar card and PAN card to the e-wallet mobile applications. The RBI had earlier stated that the customers, who are not willing to follow the KYC process, could close their PPI accounts and get the balance money transferred into their respective bank accounts.
For instance, the digital payments arm of Amazon India, Amazon Pay, has witnessed a sizeable drop in cash loading into the e-wallet. Commenting on the matter, a spokesperson for the ecommerce giant told ET, “Cash loads have reduced by 95%. This will mean lower digital payment adoption in the long run, especially as we expand further into smaller cities and towns. We are losing an opportunity to engage customers who typically do not use electronic instruments.”
The mandatory full KYC requirement has driven off many customers, who are now shifting more to cash-on-delivery. Incidentally, cash-on-deliveries accounted for 40% of Amazon India’s total transactions after demonetisation in November 2016. However, in the months since then, it has jumped back to 60%, claimed the company’s spokesperson.
An email query Inc42 sent to Amazon India’s communication team did not elicit a response till the time of publication.