Fat profit institutions continue to board UID bandwagon
Moneylife Digital Team 12 November 2010

Many large corporations are looking at Aadhaar as a pool of prospective customers and are joining hands with UIDAI. Visa is the latest entrant on board the UID bandwagon

The business of providing an identification number to around 60 crore is becoming lucrative day-by-day. Visa, an electronic payments technology company, has said it has developed a unique payment solution, using the Unique Identification Authority of India (UIDAI) platform.

The solution is designed to provide a payment infrastructure for unique identification (UID) or Aadhaar holders, especially the un-banked and under-banked.

In a release, Visa said it would provide its infrastructure to process payment transactions using biometric authentication from Aadhaar. As part of the proposed solution, once an individual enrols into Aadhaar, the partner bank can issue a Visa payment card, linked to his/her Aadhaar biometric authentication.

Visa is enhancing its systems to handle biometric data along with payment data and integrate with Aadhaar for authentication purposes. Visa is working with Total System Services Inc (TSYS), a leading global technology company, as the biometric authentication technology partner, for the UIDAI project, it added.

It's nothing illegal for an institution like Visa to join the UID bandwagon. However, the question is why a for-profit organisation would want to join the controversial project and spend its own money to establish this new infrastructure? There are three aspects.

One, UIDAI has a huge budget and the authority is likely to spend more than Rs45,000 crore over five years. For FY11, its budget allocation is Rs1,900 crore and a major part of this amount would be used for reimbursement of enrolment costs to the registrars as well as residents.

Second, UIDAI cannot handle a project to tag 60 crore residents on its own. And third, if anybody wants to carry out targeted marketing aimed at a population of 60 crore at one go, then UID certainly would prove to be a bonanza. (See: http://www.moneylife.in/article/78/7819.html).

In the release, Visa said, "Keeping in mind the large un-banked and under-banked communities in many parts of the country, Visa along with its banking partners will soon launch a financial inclusion pilot, using the UIDAI platform, after identifying suitable locations."

Already, the UIDAI has opened a can of worms by agreeing to allow access to registrars, like state governments and banks, as well as insurers who will collect individual data for the authority through their know-your-customer (KYC) database. This means that any company may be able to access the huge database (of about 60 crore people expected by the end of 2015) simply by becoming a 'registrar' or 'partner' and using the data for their own marketing initiatives. (See: http://www.moneylife.in/article/78/9594.html).

The UIDAI had selected three consortia - Accenture, Mahindra Satyam-Morpho and L1 Identity Solutions - to implement the core biometric identification system for the Aadhaar programme. UIDAI has stated that the three agencies would design, supply, install, commission, maintain and support the multimodal automatic biometric identification subsystem. The three vendors would also be involved in development of the multimodal software development kit (SDK) for client enrolment stations, the verification server, manual adjudication and monitoring functions of the UID application.

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