Small shopkeepers struggle after RuPay-UPI integration due to KYC norms

Small shopkeepers who are able to process payments through credit cards using a QR code are facing inconvenience over completing know-your-customer (KYC) requirements after the integration of RuPay with UPI.

For the shopkeepers, UPI emerges as an easier option as it only involves the creation of an issuer account for accepting payments.

However, for them to accept credit card payments using a QR code, the shopkeepers have to follow the payment network’s guidelines, which necessitate a merchant KYC process.

This is a significant task for payments companies that have deployed QR codes at small shops throughout the country, said TOI quoting Arpit Ratan, founder of Signzy, a fintech company specialising in digital customer onboarding after KYC compliance.

RBI’s norms for permitting KYC verification are more stringent than those of SEBI which uses AI for KYC video verification.

There are suggestions from the industry to make video KYC less stringent, particularly when an underlying bank account is already present, said Ratan to TOI. “There are also a lot of steps in the present video KYC, which do not seem to add value. For instance, the customer is required to hold up the PAN card. Now, the PAN number can be verified online,” said Ratan.