Customer identification process to be done electronically!

What’s the Paytm recent addition?

Ecommerce platform, Paytm has recently launched an electronic, Aadhaar-based client-authentication system; eKYC; (E-Know Your Customer). This addition will help upgrade its digital wallet customers to account holders of its upcoming payment bank and enable them to carry out transactions exceeding Rs. 10,000 a month.

The need for KYC (Know Your Customer)

Regulated entities like banks and wallet providerscarry out certain customer identification proceduresas they are required before establishing account-based relationships and undertaking transactions.These procedures are a part of KYC (Know Your Customer) process of customer verification which will help identity theft, financial fraud, money laundering and terrorist financing.

The KYC process; in use

A typical KYC process involves a lot of paper work and human effort; right from collecting the customer’s original documents to verifying them and making the data entry into the customer information management systems. This process is filled with operational challenges in managing the physical documents, often takes several days for verification to be completed and is prone to fraud as documents can be easily forged.

How does Paytm’s eKYC process work?

As per reports, Paytm’s Aadhaar based eKYC is entirely paperless, instant and secure. Customer’s identity is verified instantly on the basis of matching biometric scan of the fingerprint or IRIS against Aadhaar database.

When a customer sends a request to upgrade their Paytm account, they have two options in hand. They can either choose to visit their nearest Paytm centre or request a visit from a Paytm agent at their preferred address. Upon arrival, Paytm’s agent carries out a quick and easy eKYC process using mobile-based biometric scanner.

At the same time, customer’s consent is also captured using Aadhaar based eSign, ensuring that the entire process is completely paperless. The process is also extremely secure since biometric details are used to verify identity thereby reducing the possibility of fake/forged accounts.

Reportedly, Paytm’s Vijay Shekhar Sharma believes that its eKYC is the key to realizing their goal of bringing 500 million Indians to the mainstreameconomy.Will this goal be accomplished by Paytm’s recent addition; eKYC? Please share your thoughts in the comments section below:

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