The National Payments Corporation of India has asked banks to discontinue Aadhaar-based payments through Unified Payments Interface and Immediate Payment System channels by August 31, 2018. “Pay to Aadhaar” is a functionality in UPI and IMPS transactions under which a user can instantly transfer funds to an Aadhaar number.
The NPCI is a private entity that a consortium of banks runs. This consortium operates the UPI and other services, and acts as a regulator for the payments industry.
The payments body said it proposed the removal of “Pay to Aadhaar” functionality in both UPI and IMPS before the steering committee in a meeting held on July 5. The steering committee comprises 18 bank and non-bank payment players, including the State Bank of India, Citibank, HDFC Bank, Paytm Payments Bank, Maharashtra Gramin Bank, reported The Financial Express.
“Aadhaar number is a sensitive information and the revised framework about its usage in the payment landscape is still evolving,” NPCI said in a letter addressed to all banks on July 17. “The proposal of removing the Aadhaar number functionality was approved by the steering committee.”
The NPCI said the “Pay to Aadhaar” functionality should be done away with by August 31, 2018. “All interface currently offering this functionality, such as UPI apps and third party apps, should remove this option from their respective apps by August 31, 2018,” it added.