With Aadhaar-data unavailable to fintechs, banks, insurers, telcos and other private enterprises after the recent Supreme Court ruling, the UIDAI has hinted that QR Code and offline Aadhaar KYC may be considered.
A circular from the UIDAI is supposed to have encouraged banks to develop web and mobile applications that can leverage QR codes printed on Aadhaar copies for the purpose of doing KYC.
Our Chief Business Officer Wriju Ray highlights on-ground realities due to which QR Code-based Authentication will not work.
1. While eKYC had a special status in the KYC Master Directions, the offline mechanism is merely a way to present the Aadhaar card and read it using the QR code as a way to validate it. There is now way to even verify it against the Aadhaar database.
2. The QR code in most Aadhaar cards cannot be read. This is because most Aadhaar cards are laminated and cropped to fit the wallet .
3. Older cards do not have a QR code. It is estimated that only between 30% to 50% Aadhaar QR codes can be read
4. The mechanism to download one's machine readable Aadhaar from the UIDAI website requires an OTP. However, only 30% of card holders have a phone number linked to their Aadhaar. So 70% of people will be left out.
5. Given how cumbersome the process is, drop offs are likely to be high.
'Is it back to the dark ages of paper KYCs?'
“All eKYC authentication is stopped now, we are trying to develop our own means of getting KYC done with physical documents by using technology so that cost can be reduced,” said a top executive of a payment company on condition of anonymity in an article in the Economic Times
Fortunately, technology solutions for efficient and accurate Digital KYCs are available.
Wriju Ray is Chief Business Officer at IDfy.
He can be reached on firstname.lastname@example.org and on LinkedIn here