UIDAI data privacy concern: Fintechs lose access to key eKYC system

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The Unique Identification Authority of India (UIDAI) has effectively shut out several fintech players from carrying out Aadhaar-based eKYC through entities who use sub-AUA (authentication user agency) licences

Shritama Bose

The Unique Identification Authority of India (UIDAI) has effectively shut out several fintech players from carrying out Aadhaar-based eKYC through entities who use sub-AUA (authentication user agency) licences. A sub-AUA is an entity that uses Aadhaar authentication for its services through an existing AUA. This has been done by disabling the application programme interface (API) through which the sub-AUAs used to carry out Aadhaar-based eKYC. Jitendra Gupta, MD, PayU India, told FE that there had been no communication to the sub-AUAs that assisted PayU India from the UIDAI on this matter. “This seems to have impacted only private fintech players and not banks or insurers. This has been the case since yesterday,” he said. Gupta tweeted, “Aadhaar stopped all KuA and sub-KUA to do validations!! Suddenly, all fintech businesses banking on Aadhaar left scrambling!! Indiastack story will crumble very soon if it continues in this manner.”

According to sources familiar with the development, the displeasure of the Supreme Court on Aadhaar data being accessed by private parties has prompted the UIDAI to disallow the sub-AUAs from doing Aadhaar-based eKYC. They explained that once the UIDAI introduced facial recognition, Virtual IDs and Token Aadhaar numbers, this decision could be reversed. As of March 31, the number of live AUAs were 310, according the UIDAI website. The Aadhaar dashboard on UIDAI’s website shows there have been no AUA-driven authentication transactions in the past two days. The authentication system may have seen disruptions earlier as well, with no records of eKYC transactions appearing for March 24. The Aadhaar-based eKYC, which is a significantly cheaper method of verifying customer credentials than a physical KYC, is particularly significant for fintech players.

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