The National Payments Corp of India (NPCI) and the Unique Identification Authority of India (UIDAI) are considering how to expand authentication factors used to vet customers using the Aadhaar Enabled Payment System (AePS) amid an increased push toward contactless transactions, in line with Covid-19 hygiene protocols.
The current mode of biometric authentication used for vetting credentials in the AePS system — fingerprint scanning — is not in line with distancing norms. It requires bank account holders to press fingertips to scanners at micro-ATM points multiple times. Moreover, transaction failure rates are high as the fingerprint patterns of those engaged in manual labour fade and become less distinctive over the years.
NPCI, with the approval of UIDAI, has initiated a test rollout of facial recognition with four leading banks. Those running the pilot are ICICI Bank, Yes Bank, RBL Bank and Fino Payments Bank, said people aware of the matter. It’s being tested on non-financial transactions in the first phase. A full-scale rollout will follow if results are “satisfactory,” NPCI told the banks in an email, which ET has seen.
“The failure rate on AePS transactions due to fingerprint mismatches is currently 19-20%. Facial recognition will be a more advanced alternative, which is expected to reduce failure rates and take care of sanitisation issues pertaining to Covid,” said Ashish Ahuja, COO, Fino Payments Bank. “The pilot is currently on with four banks and we will complete the project in the next two weeks.”
NPCI, UIDAI, Yes Bank, ICICI Bank and RBL didn’t respond to queries.
The banks will meet UIDAI and NPCI representatives to study the results of the pilot project and take a call on scaling up the initiative.
Facial recognition only needs a smartphone or other device running Android version 7 and above, while iris checks require a specialised machine.
‘Has Been Tried Before’
The banks also conduct two-step authentication with a one-time password sent to the mobile device of the beneficiary linked with UIDAI.
Separately, UIDAI has also asked Authentication User Agencies (AUAs) and KYC User Agencies (KUAs) to step up the deployment of iris biometric devices for performing Aadhaar-based authentication in an internal circular issued on July 17. ET has reviewed a copy of this.
“Iris biometric devices are contactless devices… as physical touch by resident is not required to perform Aadhaar authentication,” it said. “Authentication success rate is also potentially higher than (fingerprint scanners).”
Industry executives said this is not the first time UIDAI has sought to step up the deployment of iris and facial recognition. Pricing and cultural challenges had prevented the scaling up of these methods and fingerprint scans became the norm. Covid protocols are expected to change that.
The AePS payment channel operated by NPCI has become a digital channel key to DBT through the Jan Dhan architecture.
According to Reserve Bank of India data, AePS transactions in the June quarter crossed 1.2 billion, worth a total 53,000 crore, doubling in volume and more than 60% in value over the preceding three-month period, led largely by the transfer of Covid-19 cash payouts to millions of daily wage workers, farmers and self-help groups among others.