Millions of small traders face the threat of payment stoppage; Payment companies requested the Reserve Bank to extend the deadline
As the deadline of September 15 set by the Reserve Bank of India (RBI) to complete the Re-KYC process for merchants is approaching, the concerns of payment aggregators and fintech companies are increasing. Due to practical difficulties in meeting this deadline, major payment companies have approached RBI and sought some more time to complete this compliance process smoothly.
According to the information received and financial sources, there are lakhs of small and big merchants across the country who use the services of various payment aggregators to accept digital payments. Under the new guidelines of RBI, it is mandatory for all these traders to do KYC (Know Your Customer) afresh. Payment companies argue that doing physical and digital verification on such a large scale is a long and complex process. If this process is not completed by September 15, the accounts of many traders may be frozen or suspended. If this happens just before the festive season, not only will the work of merchants be badly affected, but it may also cause disruption in the digital payment ecosystem.
It is noteworthy that the Reserve Bank has taken these strict steps with the aim of preventing increasing fraud, money laundering and financial irregularities in digital payments. The main objective of the central bank is to ensure that the identities of all merchants connected to the payment network are completely authentic and transparent. However, it will now be important to see whether the RBI considers extending the deadline in view of these practical challenges faced by merchants and payment aggregators, or strictly sticks to its scheduled schedule.