UIDAI asks several payments companies to stop offering Aadhaar-based services: Report
The directive applies only to non-banking companies and not to banks or payment entities with banking services such as Paytm.
The Unique Identification Authority of India has asked several payments companies to stop offering any Aadhaar-based services on their platform, The Economic Times reported. A Supreme Court verdict last month upheld the validity of Aadhaar, but prohibited private companies from using the biometric authentication service.
“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 authority said in a letter sent on October 12, according to the newspaper. It asked the companies for a confirmation of closure and a plan to exit the Aadhaar system.
However, the letter was sent only to non-banking companies such as PayPoint, Eko India Financial Services and Oxigen Services, the newspaper said, citing unidentified persons. Banks and payment entities with banking services, such as Paytm, have not been notified.
Ketan Doshi, managing director of remittance firm PayPoint, said the Aadhaar authority’s directive would be a “huge blow” for the digital payments industry.
“We are now looking for alternate methods for digital Know Your Customer and are also seeking guidance from the regulator in this matter,” Oxigen Services Joint Managing Director Sunil Kulkarni told the newspaper. “We are also learning that there could be a solution around QR codes which is being developed.”
Meanwhile, telecommunications companies Vodafone Idea, Bharti Airtel and Reliance Jio have submitted their plans to exit the Aadhaar ecosystem, The Economic Times reported on Tuesday. The companies said they are working with the telecom department of the government for alternative verification methods. But they added that their sudden exit from the Aadhaar process will mean more investments, which will become a financial burden.