On 29th September 2016, the Reserve Bank of India circulated a memo stating Aadhaar-enabled points-of-sale (PoS) terminals as well as ATMs were to be compulsorily installed around the country by January 2017. But, because of the slow rate of the necessary infrastructure’s deployment, the deadline was extended till June 30th, 2017. However, with hardly two months to go, industry experts have stated that the capacity to produce such elaborate machines falls short of its demand. They now speculate that the deadline may have to be further delayed.
The earlier reason given by the RBI for the delay from the January deadline was the mismatch between the demand and supply of devices that have Aadhaar enabled on them. The industry experts have found that this mismatch has still not been resolved and this is probably what will cause a further delay.
Dewang Neralla, the CEO of Atom Technologies Ltd., a payment services provider commented saying, “It takes time to build technology. The standards are still being developed by NPCI (National Payments Corporation of India); even the development and certificate of software takes time which is very essential for the implementation of biometric authentication in new PoS machines”.
According to Ramaswamy Venkatachalam the Managing Director, India and South Asia of FIS, a US-based banking technology-provider, the main concern for banks today is the cost of the software that allows processing of biometric based payments.
When customers begin using biometrics instead of the usual ATM PIN, the machine must be converted to understanding the new language. He explained that for this, the manufacturer has to install a small piece of software along with the biometric reader and this software is what is expected to cost banks money as it has to be installed in thousands of ATM machines.
Venkatachalam also went on to add that an additional problem that could arise out of biometric based transactions is the complexity of the trace and audit part of each transaction. Banks will no longer be the only entity involved in the transaction and this will give rise to confusion regarding where the authentication error went wrong.
Delta ID Inc. is an iris scan developer that is presently in talks with some banks for the use of its software in Aadhaar-enabled PoS and ATMs.
He added that while the technology is present and ready to go, the roadblock arises from the time and effort that goes into the process of design, implementation, testing, and certification of these devices.
A.P. Hota, the Managing Director and CEO of NPCI said that in the last 3-4 months, 150,000 terminals have come up. The National Bank for Agriculture and Rural Development (NABARD) is now looking to give incentives to banks to reimburse the cost of each terminal up to Rs. 6000, in tier-f and 6 centers.
On June 13 2016, DCB Bank launched Bengaluru’s first ATM machine that accepted the Aadhaar number and biometric instead of the ATM/Debit card and PIN. This ATM was launched by Nandan Nilekani, former Chairman of the Unique Identification Authority of India. The Bank had launched its first aadhaar based ATM in Mumbai in April 2016.
This decision to use Aadhaar as an alternative to authenticate domestic card transactions came about after being suggested by a working group established by the RBI.