Aadhaar Based-KYC To Come At A Price For Private Companies Says UIDAI

The Unique Identification Authority of India (UIDAI) has directed that it is mandatory for private organisations to pay a fee of INR 20 ($0.2) for each eKYC transaction and 50 paise for authentication of the unique ID, according to a gazette notification issued on March 6.

The new regulation has however exempted government entities and the Department of Posts from the Aadhaar authentication charges. The notification also cleared that these Aadhaar authentication charges will be levied in addition to the license fees and financial disincentives as applicable.

“Aadhaar authentication services shall be charged at INR 20 (including taxes) for each eKYC transaction and INR 0.50 (including taxes) for each Yes/No authentication transaction from requesting entities,” the notification read.

UIDAI also added that the entities will have to deposit the authentication transaction charges within 15 days of issuance of the concerned invoice based on the usage.  The delay in payment beyond 15 days shall attract interest compounded at 1.5% per month and discontinuation of authentication and eKYC services.

The government agency also noted that if an organisation does not wish to pay authentication transaction charges then it will have to discontinue its use of Aadhaar authentication services. However, the transaction charges as applicable till the date of deactivation of access to authentication services will have to be paid.

This announcement comes in right after the government approved promulgation of an ordinance which will now allow voluntary use of Aadhaar by private entities. According to the ordinance,  private entities are allowed to use Aadhaar authentication only when they are compliant with the standards of privacy and security specified by the authority.

It also ruled that any user cannot be denied of services for refusing or being unable to undergo authentication.

With this ordinance, the debate continues to remain that is it a violation of the 2018 Supreme Court judgement which had scrapped Section 57 of Aadhaar Act barring private companies from using Aadhaar details.

The Supreme Court ruling was a major blow for the fintech and telecom companies who mainly relied on the Aadhaar-based verification process for the eKYC process. The players had been exploring other alternatives and also sought help from the government department and Reserve Bank of India to suggest alternative ideas.

Following the ruling, the Ministry of Electronics and Information Technology (MeitY) had introduced an Aadhaar amendment Bill during the winter session of the Parliament in January proposing voluntary use of Aadhaar for the customer verification process.

At the time, member of parliament, Shashi Tharoor had also said that the Bill is, “a violation of Supreme Court judgment and the fundamental right to privacy.”

Thought the January bill clearly mentions that Aadhaar details can be used only on a voluntary basis, many are of the view that it still violates the earlier SC decision.