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Startups leveraging Aadhaar system to develop database and payment solutions


India’s Aadhaar biometric authentication system has provided the foundation for at least nine startups, which are leveraging the system to develop various technologies including database and payment solutions, according to a report by Live Mint.

OnGrid (Handy Online Solutions Pvt. Ltd.), which launched in May, is using Aadhaar-based authentication to check the backgrounds of blue-collar workers and ultimately create a database containing information on employee’s past job records, performance ratings, and salary details.

“Blue-collar industry has the highest amount of frauds such as using fake identity cards. And the industry is such, that the attrition rates go up to 80% so it becomes very expensive for any company to do a background verification,” said Vineet Bansal, co-founder of OnGrid.

In 2009, the Unique Identification Authority of India (UIDAI) initially introduced Aadhaar as a national biometric-based identification system before it became the foundation for government agencies in sending direct transfer payments.

In addition to OnGrid, IDfy (Baldor Technologies Pvt. Ltd), TrustId (Swabhimaan Distribution Services Pvt. Ltd), and Simpal Mobile Payments and Information Services are also operating in this segment.

Simpal is leveraging the biometric data linked with Aadhaar to be used as a method of payment. The startup has partnered with the University of Biejing’s Department of Pattern Recognition to develop the Android-based POS mobile phone, OctoPOS, which is integrated with iris recognition.

The mobile phone will offer other methods of contactless payments integrated with Visa, MasterCard or RuPay cards.

“Out of about estimated 30 to 40 million merchants, 1.2 million merchants have a POS [device],” said Vineet Toshniwal, founder of Simpal. “This is because, for a majority of the merchants, a small transaction of Rs20-30 becomes unviable over a POS. [For India]…to become a cashless economy, all such merchants would have to adapt to such a technology of cashless payment that is easy to understand and use.”

UIDAI certified OctoPOS in May to integrate with the Aadhaar database. Simpal is aiming to launch the first order of 1 million OctoPOS devices in the next six to nine months at a price of $100 each.

The smartphone can also be used for eKYC (know your customer) process by banks and telecom companies.

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