Paytm is a well-known mobile payment application that has digitized payment for more than 1.3 Million users who have registered on the platform. Paytm intends to provide the best and most convenient, user-friendly financial services to its users, all at one place. Whether it is about making bank transfers, transferring money through UPI, making recharge or bill payments or making the use of FASTag service- Paytm has it all.
However, with increasing facilities and ever-increasing user-base, it becomes quite important to ensure the safety of users and to keep their financial information secure. To ensure this, KYC or ‘Know your Customer’ becomes an all the more important thing to do.
Before we move on to why KYC is important and how you get it done, let’s first understand what KYC is.
What is KYC?
Amidst the ongoing demand of online financial services, there is an increasing risk of criminal activities and frauds. This makes financial institutions and users more vulnerable to fall prey to fraudsters. To stay away from such fraudulent activities, the process of KYC (Know your Customer) has been designed.
KYC aims to protect financial institutions and users against various fraudulent activities such as phishing, money laundering, etc. Effective KYC services work as the backbone of a strong financial platform and build security and reliability in the users’ minds. With the importance of growing KYC compliance, more stringent regulatory requirements have come into play and banks and mobile payment applications like Paytm have assigned dedicated, significant resources to look into KYC compliance processes in order to respect and ensure their users’ financial security.
The KYC process involves several steps that establish customer identity, understand the nature of customers’ activities, ensure that the sources of their customers’ funds are legitimate and assess money laundering risks associated with their customers.
Is KYC Required for UPI Money Transfer on Paytm?
The simple answer here is – NO. KYC is not required for making UPI money transfers on Paytm. Any user can make UPI-based transactions on the Paytm app without any concerns on the safety and security of user data. All the users registered on Paytm have to link a bank account with the Paytm app in order to perform UPI money transfers. Users become automatically verified when they link their bank account with the Paytm app since banks have already performed the KYC-check for all their users.
How to Set up UPI?
You can easily set up your UPI account on the payment mobile application by following these simple steps-
- Download a mobile payment application, like Paytm
- Just enter your mobile number. If you have a dual SIM phone you may be prompted to select the SIM slot in which your mobile number is present
- An SMS will be sent from your number to verify your mobile number
- Once this is done, you will have to select your bank name from the list that will be presented to you. Please make sure that the mobile number registered with your Bank is the same as the one you entered earlier. Your bank account details will now be fetched from the bank using your mobile number
- If you are linking your Bank for the first time, you will be asked to set up a UPI PIN. You will need your Debit card details for setting this up
- Your Bank Account is now linked via UPI and you are ready to make your first payment
It is important to note that the mobile number that you enter while setting up your UPI ID should be linked to your bank account. Your UPI ID is one that will be shared with you by your bank. A UPI ID is unique to every account holder. It is related to your personal details. For example- Your UPI ID on Paytm is the same as your mobile number registered with your bank account. Suppose, your mobile number is 98XXXXXX90, then your UPI ID on Paytm would be 98XXXXXX90@paytm.
UPI IDs are simple to set and easy to remember. A UPI ID must be shared with the sender in order to receive money. However, the UPI PIN is strictly confidential as it acts as a password to confirm the transaction through your mobile payment application.
How to Use UPI to Transfer Money?
UPI mobile applications allow you to transfer money in multiple ways. Whether it is VPA, QR code, mobile number, or UPI ID, each of these methods is equally easy to use. Explained below is the process that you need to follow to transfer money through either of these methods.
Sending money through UPI is easy and safe. You may send money using any of the following ways-
- Selecting a Contact/Entering Mobile number – Sending money is as simple as sending a message. Just select a phonebook contact or enter a mobile number, specify the amount to be transferred and enter your PIN. That’s it! Your payment will be completed in a few seconds.
- Scanning a UPI QR code – You can also send money through UPI by scanning the receiver’s QR code. All you need to do is open the mobile payment application like Paytm on your phone, click on ‘Pay’, and select ‘QR code’. Scan the QR code of the receiver and enter the amount to be paid. Now enter your PIN and your payment will be completed in a few seconds.
- Entering UPI ID – To send money through UPI ID, all you need to do so is open the mobile payment application, and enter the receiver’s UPI ID. After this, you need to enter the amount that needs to be transferred and verify the transaction by entering your MPIN. Your transaction will be completed in a few seconds.
- Entering Account Number & IFSC – This the traditional way of payments and it is also supported on UPI. You may enter the account number & IFSC of the person you want to send money to, specify the amount and enter your PIN. Your payment will be completed in a few seconds.
While KYC is an important thing for users to do, Paytm does not require its user to go through any additional KYC processes to perform UPI transactions on the app. However, it is important to note that this does not question the safety of user data on the Paytm app.