After the Supreme Court‘s decision on Aadhaar, fintech companies have been struggling to find alternative mechanisms using technology to authenticate its users.
As the industry waits for Reserve Bank of India‘s (RBIs) decision on acceptable modes to do Know Your Customer (KYC) authentication, the companies explore ways to get around digital KYC.
According to reports, fintech players have already made multiple representations to the sector regulators, to help them continue customer onboarding using Aadhaar, through industry bodies like Payments Council of India and Digital Lenders’ Association of India.
“Aadhaar-based eKYC should be allowed for regulated entities on a voluntary basis…this will meet the test of proportionality and hence would not violate the privacy of the person as well,” said Adhil Shetty, chief executive officer, BankBazaar, an online lending marketplace.
Apart from the fintech industry, Supreme Court’s Aadhaar verdict has also affected the telecom industry that was using the Aadhaar authentication mechanism to onboard customers.
Until no other solution or verdict is reached regarding the use of technology for doing the KYC, the companies are left with the expensive and the costly method of physical verification, in order to complete the KYC.
In a related development, UIDAI extended the deadline for implementation of virtual Aadhaar till January 31, 2019.