UIDAI Asks Digital Payment Companies To Stop Aadhaar Based Service On Platforms

| October 17 , 2018 , 13:36 IST

The Unique Identification Authority of India (UIDAI) has asked a number of digital payments companies to stop offering Aadhaar-based services on their platforms, media reported on Wednesday.

The letter was quoted by ET as saying, “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 directive of the UIDAI comes after the recent ruling of the Supreme Court that prohibits private companies from using biometric-based authentication services.

According to reports, a clutch of private companies including PayPoint, Eko India Financial services and Oxygen Services has received notices from UIDAI in the last two days.

Also Read: UIDAI Denies Hackers Claims Of Leaking Data Of TRAI Chairman R S Sharma From Aadhaar Database 

In the letter, UIDAI has also asked companies an action plan for exiting the Aadhaar ecosystem which shall include without limitation the aspects enumerated under Regulation 23 (2) of the Aadhaar (Authentication) Regulations, 2016.

The letters from UIDAI have only been sent to non-banking companies that are licensed to provide prepaid payment services. 

Commenting on the letter directive a digital payments company owner Sunil Kulkarni, joint managing director of digital payments company Oxygen Services was quoted as saying, “We are now looking for alternate methods for digital KYC and are also seeking guidance from the regulator in this matter.” 

The Supreme Court on September 26 struck down section 57 of the Aadhaar Act disallowing private companies from accessing and saving the Aadhaar data of Aadhaar holders.

As a number of payment companies rely on Aadhaar based eKYC to drive customer adoption at low cost, they need to look at other alternative options as a substitute.