UIDAI asks payment companies to stop Aadhaar-based services
New Delhi: In its first major directive after the recent Supreme Court ruling, the Unique Identification Authority of India has asked several digital payment companies to stop offering Aadhaar-based services on their platform, the Economic Timesreported. The Supreme Court in its earlier directive had prohibited private companies from using Aadhaar-based authentication services.
According to the business daily, the Aadhaar body, in a written communication, has directed several digital payment companies to provide confirmation of closure of Aadhaar-based services and to present a plan on how they will exit the Aadhaar ecosystem. “Since your organisation can no longer use Aadhaar-based authentication services… you may cease all operations with respect to Aadhaar-based authentication immediately, if not already done,” the ET report quoted the letter as saying.
Industry experts believe that UIDAI’s move will affect last-mile remittance and digital payments that form the mainstay of business for digital payment companies.
The Aadhaar body has also asked payments companies to accept customers demand for delinking Aadhaar from their database.
“We are now looking for alternate methods for digital KYC and are also seeking guidance from the regulator in this matter,” the business daily quoted Sunil Kulkarni, joint managing director of digital payments company Oxigen Services as saying.
Industry participants believe in the absence of Aadhaar-based verification, remittances, which generally shoot up during festival season, will take a big hit this year.
According to an earlier report in The Times of India, the government is promoting offline verification tools for Aadhaar such as QR codes and paperless KYC that will not require sharing of Aadhaar number or involve UIDAI servers for authentication. The offline process will fulfil the top court’s order ruling out biometrics-based Aadhaar authentication for private firms.
In the QR code option, Aadhaar print outs offer 3 codes for verification. Two have demographic info plus photo while one will have only demographics. These codes are tamper proof and UID number is not revealed.
These QR codes can be downloaded from Aadhaar site and presented to any service provider who can download QR code reader application or procure QR code scanner to read those codes, the daily said.
This process eliminates the need for fingerprint or iris authentication and does not involve Aadhaar server.