Transactions through mobile wallets fell marginally in the month of November, both in terms of value and volume, after registering a record growth in October 2018, according to data released by the Reserve Bank of India (RBI). The sudden fall in transactions came after mobile wallet companies had to stop using Aadhaar for electronic know your customer (e-KYC) to enrol new customers.
In November, nearly 347.32 million transactions worth Rs 16,108 crore were recorded compared with 368.45 million transactions amounting to Rs 18,786 crore in October. There was a decline of 14% in transaction value and a drop of 5.7% in the transaction volume.
It may be noted that the Supreme Court of India ruled in September that the Aadhar number can only be used for welfare schemes and delivering state subsidies. On 26 September, a five-member Constitution bench headed by former chief justice Dipak Misra said it was “unconstitutional” for private firms to seek Aadhaar-based authentication.
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Since the apex court verdict, some wallet companies changed their identification mechanism to offline. The cost of authentication rose to Rs 100-150 per person for a physical KYC from Rs 15 per person under e-KYC.
On the other hand, UPI transactions rose and crossed the 500 million mark for the first time in November. In the past one year, the monthly UPI transaction volume has risen by over 2,000%, according to data by the National Payments Corporation of India (NPCI), which developed the instant payments platform ‘Unified Payments Interface’ or UPI.
Meanwhile, there is also big concern over customer verification completion as the RBI had earlier asked mobile wallets to complete the verification process by the end of February 2019.