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Fintech players do not expect a major impact from the Unique Identification Authority of India’s (UIDAI) move to bar a few e-KYC User Agencies (KUAs) and Authorised User Agencies (AUAs) from carrying out e-KYC verification.
More than a dozen players BusinessLine spoke to said that though the UIDAI decision essentially goes against the Digital India concept, their businesses have not been impacted as they were already carrying out physical KYC verification.
Deepak Jain, founder of lending platform FlexiLoans, said the company had been collecting physical documents from users/borrowers right from the beginning. “We provide loans of ₹4-5 lakh and for that we do not mind spending ₹400-500 on collecting physical documents,” he said. Even as the Centre was earlier pushing for eKYC, many customers were not comfortable with it, he added.
However, companies that depend solely on Aadhaar for eKYC might face some initial hiccups.
Naveen Surya, Chairman of the Payment Council of India, said that over the past year, there has been a spurt in the number of smaller players acting as sub-KUAs and sub-AUAs. They perform authentication services or e-KYC for fintech players, whereas the ASAs (authentication service agencies) work directly for the UIDAI as data centres.
While the ASAs can also be KUAs or AUAs, the sub-KUAs and sub-AUAs are not allowed to store customer data.
The curbing of KUAs and AUAs came into the limelight after Jitendra Gupta, MD of PayU, tweeted that it will be detrimental to all stakeholders in the fintech ecosystem.
Temporary issue
However, Shailaz Nag, founder of PayU, said the issue is temporary and that the UIDAI cannot revoke all the KUAs/AUAs because it will then topple the entire IndiaStack system.
(IndiaStack is a set of APIs that allows governments, businesses, start-ups and developers to utilise a common digital infrastructure for cashless service delivery.)
Jose Thattil, CEO and co-founder of Phi Commerce, said that once the prescribed security measures are put in place and adhered to by all players, the e-verification services should be enabled.
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