India in need of simplifying user verification process to bolster digital payments
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While India has witnessed a surge in digital payments, the country’s Know-your-customer (KYC) procedure continues to be cumbersome, especially for the elderly, the poor, or migrants, limiting the adoption of digital payments. KYC is a Reserve Bank of India-mandated document verification process that financial institutions use when clients avail themselves of their services. To prevent money laundering, availing financial services requires proof of identity and address. However, the rigidity with which this law is followed is up to individual financial institutions, and it may lead to harassment for citizens and high costs for the financial sector. “KYC is a problem crying to be fixed as of yesterday. In a world where we have Aadhar and some of the best digital public infra in the world, it also seems very doable,” Radhika Gupta, chief executive of Edelweiss Mutual Fund, one of India’s biggest asset management companies, reportedly said in April. India’s digital public infrastructure (DPI) includes a Unified Payments Interface (UPI) public platform and Aadhaar, touted as the world’s largest biometric identification system. In digital payments, UPI facilitates 13 billion transactions per month and serves about 350 million individuals and 50 million merchants. According to a survey by consulting firm Kearney, in association with Amazon Pay (NASDAQ: AMZN), the user experience, from onboarding to regular usage and servicing, plays a crucial role in adopting digital payment systems. However, primary research indicated that about 40% of merchant respondents find digital payment applications too complicated to navigate. The research was conducted with over 6,000 consumers through an online survey and with over 1,000 merchants through offline and online methods across 120 cities, representing various regions, income groups, city categories, age brackets, and genders. The survey suggested creating user-friendly consumer journeys by streamlining documentation and know-your-customer processes, optimizing user interfaces, and establishing responsive customer…
Filed under: News - @ July 26, 2024 9:16 am