UIDAI Asks Digital Payment Companies And Mutual Funds Registrars To Stop Offering Aadhaar-Based Services

After tightening the rope at Telecom companies, the Unique Identification Authority of India (UIDAI) has now shifted its focus on digital wallets companies, and mutual funds registrars asking them to stop authentication using the 12-digit unique identification number.

The Unique Identification Authority of India also asked digital wallets to provide a confirmation of stopping Aadhaar-based services as well as their exit plans. A letter was sent to non-banking companies such as PayPoint, Eko India Financial Services and Oxigen Services, stating,

“Since your organization can no longer use Aadhaar-based authentication services…you may cease all operations with respect to Aadhaar-based authentication immediately, if not already done.”

A Supreme Court verdict last month upheld the validity of Aadhaar but prohibited private companies from using the biometric authentication service. In June, UIDAI had restricted use of Aadhar database by the digital payment companies, labeling them as local agencies, as against to banks who are allowed full access to it.

In April, the UIDAI introduced a digitally-signed QR Code on e-Aadhaar – the electronic version of Aadhaar that can be downloaded from UIDAI website – that would contain demographic details of the Aadhaar holder along with a photograph to facilitate better offline verification of individuals. 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.


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