Digital payment and wallet platforms like Paytm, Google Pay, and PhonePe, among others, have made cashless transactions a day-to-day thing now. While these apps have been around for a while, they gained popularity after the demonetisation of Rs 500 and Rs 1,000 currency notes in 2016.
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In order to prevent fraudulent transactions through these apps, the Reserve Bank of India made KYC compliance mandatory for digital wallet users in early 2018. One of the biggest digital wallet platforms is PhonePe, which is owned by Flipkart. If you are a PhonePe user and want to complete your KYC, here’s how to do so from the app in a few simple steps.
What is PhonePe?
Based in Bengaluru, PhonePe is a digital wallet platform and online payment company founded by Sameer Nigam, Rahul Chari and Burzin Engineer in December 2015. Flipkart acquired the platform in April 2016 and partnered with Yes Bank in August 2016 to relaunch PhonePe as a UPI-based mobile payment app.
PhonePe lets you send or receive money, make recharges and utility payments, pay at shops, invest in tax saving funds, liquid funds, book cab rides and hotels, and order food, among others. The platform is accepted as a payment option across offline and online retailers in India.
What is KYC?
KYC is short for Know Your Customer and is mandated by the Reserve Bank of India to verify the identity of the banking customer. As part of the process, the banking platforms are required to procure personal identification details from the customer through verified documents like driving license, PAN card and Aadhaar, among others. This helps banks and digital payments platforms to ensure the authenticity of their customers as well as assess and monitor risks.
Why do you need to complete KYC?
The simplest answer to this question is to get the best out of the digital wallet. In case you choose not to complete KYC, you will still be able to access your digital wallet but with several restrictions in place. According to the RBI guidelines, non-KYC customers will not be able to add money to the wallet, send money to friends or family, or be eligible for any offers applicable to KYC customers.
In case you have not completed the KYC, you will still be able to access the money in your wallet and make payments using the amount. However, in order to add more money in the wallet, you will need to complete the minimum KYC, which involves providing your official valid document ID numbers like Aadhaar and PAN.
How to complete KYC on PhonePe
Once you have downloaded the PhonePe app on your smartphone, you will need to sign up using your primary phone number. The app will send you an OTP to verify the number and also connect the bank account associated with the number to your PhonePe account. Once done, you can open the app and complete KYC using the following steps:
- As you open the app for the first time, you will see a banner on the top with the heading, “Make the most of your PhonePe account”
- The banner shows four steps including bank account activation, activate the wallet, add a new card and add a photo
- If your mobile number is already associated with your bank account, the app will automatically activate it during the sign-up
- Tap on Activate Wallet to initiate KYC
- You will be asked to provide an ID number on the next page, which is set to PAN card by default
- Tap on change and you can select from PAN, driving license, Voter ID card, Passport, and NREGA Job Card number
- Click on the preferred document type and enter details
- Click submit
That’s it. Your minimal KYC is now done and you can continue to add money to the wallet and make transactions. Further, you can add a debit or credit card to the PhonePe account for faster wallet top-up or transactions.
What is the use of KYC in PhonePe?
KYC is short for Know Your Customer and has been mandated by the Reserve Bank of India to verify the identity of the PhonePe customer. Without doing KYC in PhonePe, users cannot add money to the wallet, send money to friends or family, or be eligible for any offers applicable to KYC customers.
Can I use PhonePe without a bank account?
Yes, you can carry out merchant-based transactions, including recharges, bill payments, and online/offline merchant transactions. However, you cannot do a money transfer as it is enabled on UPI, which in turn requires a bank account.