KYC challenges trouble small retailers using QR code to accept card payments

Mumbai, July 17 (KNN) Small shopkeepers are facing hurdles in completing know-your-customer (KYC) requirements who are able to accept credit card payments through QR code after the integration of RuPay with UPI, reported TOI.

Earlier merchants found the simplicity of UPI easier to use an issuer account for accepting payments.

However, to accept credit card payments, they need to follow the payment network’s guidelines, which necessitates a merchant KYC process.

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

While the RBI permits remote KYC verification, its norms are more stringent than those of markets regulator Sebi. Sebi’s video KYC norms allow customers to interact with software that employs artificial intelligence for customer identification, and companies can offer this process round-the-clock, unlike banks that typically operate during specific hours.

Ratan told TOI that there are suggestions from the industry to make video KYC less stringent, particularly when an underlying bank account is already present.

“There are also 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. He said that the elaborate process leads to more dropouts.  (KNN Bureau)