PayTM, PhonePe Apps Not Accepting Aadhaar for KYC in New Account Opening Process: Report

According to Reserve Bank of India (RBI) guidelines, implemented earlier in 2018 the apex bank made it mandatory for consumers to link their Aadhar Card number to their bank accounts, mobile network operator and host of other services they intended to use. The norm became mandatory for digital platforms as well, barring social media accounts. But soon payments apps like Paytm, Phone Pe and the other similar platforms requested their customers to update their Aadhar details on the respective apps. Back then, without linking your Aadhar account to these apps meant that services were abnormal, and did not allow users to transfer money, pay with the app and many other restricted features including limiting their account.

Aadhar Number Not Mandatory Anymore For Completing KYC on Digital Payment Apps

Recently, in a sudden turn of events, payments apps like Paytm and PhonePe have stopped letting customers submit their Aadhar numbers as part of the Know Your Customer process. Instead, the options for customers to choose when they initiate a KYC with these apps show a passport, Voter ID, Driving Licence etc., while the Aadhar option, which was prominent before is not to be seen.

The digital platform isn’t the first place where the omission of the Aadhar number was seen. In fact, early reports featured in the Times of India stated that big telecom brands like Reliance Jio and Airtel, who were not allowed to use the Unique Identification Authority of India (UIDAI) database as part of their verification process for users. Now it’s apparent that this trend has caught on to the digital problems and on the apps as well. So earlier updating your Aadhar number, which was considered mandatory and restricted services on the mentioned apps, is now not an option.

Here’s is a screengrab of when someone recently tried to update their KYC details with Paytm.

Why this sudden change of rules?

A report in the quint explained that the publication tried reaching out to a PhonePe representative, regarding this news. When contacted, the representative stated that PhonePe’s Aadhar eKYC licence was still pending with UIDAI. On the other hand, the report also said that other UIDAI entities like KUA were also asked to stop supporting verification for PhonePe.

But PhonePe and PayTm aren’t the only ones affected by this change, as other apps like Freecharge too stopped displaying the Aadhar number option in its KYC process. What is baffling is whether its a temporary problem or a permanent one from UIDAI and there is no information on if users registering now without their Aadhar numbers would have to do it later on or will this be a permanent fixture with digital or other services.

What happens now?

The lack of information on the whole news is sure to make everyone wonder about the future and importance of the infamous Aadhar card. Conversely, it will be interesting to see if the lack of Aadhar in the KYC option will lower the number of users for Paytm, PhonePe or even Freecharge in the future. We will, however, keep you posted as soon as we receive more information on this change in stance from UIDAI.

Moreover, there have been millions of users already on the app who had completed their KYC using their Aadhar number on these apps to avail full benefits, so what happens to their registration now? And if users are to complete their KYC using other options such as Voter ID, Passport, PAN Card or Drivers Licence; will they be eligible for full benefits on these apps? If yes, how will the services pan out. Let’s wait ad see.

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