Critics fear consumers will pay new government fees for Aadhaar authentication

India’s government will charge banks and other private companies up to Rs 20 (US$0.29) for each eKYC authentication using Aadhaar, the world’s largest biometric system, and Rs 0.50 ($0.007) per yes or no verification, under rules set down in a circular by the Unique Identification Authority of India (UIDAI) and reported by India Today. India Today and other media outlets are also warning that the cost will be applied to consumer authentications and undermine the access the system is supposed to provide to social assistance, as private companies pass the cost along.

The notification applies to banks, payment apps, telecom companies, and any other private entities using Aadhaar authentication, with an exemption for scheduled commercial banks which meet Aadhaar enrollment targets. Entities failing to pay within 15 days will be blocked from continuing to use Aadhaar, and have interest charged to their fees.

The fee amounts include taxes, and government entities and the postal service are exempt. Private companies choosing not to pay for Aadhaar services are expected to discontinue using them, notify the UIDAI, and give up access to the system.

Sucheta Dalal, activist and editor of Indian financial magazine Money Life, told the National Herald that the government will increase the rates if it returns to power following upcoming elections, as it previously did with a petroleum tax. Dalal says the change reveals Aadhaar as a business model, rather than a mechanism for improved social service delivery.

One of the petitioners in the Supreme Court case that changed the rules for private sector Aadhaar use, Rahul Narayan, told the Herald that tying fees to bank enrollment targets is a backdoor attempt by the government to make Aadhaar authentication mandatory.

The government recently pushed approval for voluntary use of Aadhaar by banks and telecoms through the cabinet after struggling to get a bill through both houses of parliament.

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