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How Aadhaar-based eKYC authentication is making transactions easy and secure

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Aadhaar number helps to prove identity to public and private agencies and therefore services like bank account opening, applying for passports, applying for LPG connection, etc converts into a shorter turnaround time.
Sunil Alvares


The Unique Identification Authority of India (UIDAI) was created for the purpose of providing a Unique Identity Number (Aadhaar) to all Indian residents which would reduce identity theft and fraudulent activities. It is helpful as it establishes their identity to public and private agencies across the country. UIDAI provides an online authentication facility to verify the identity claim of the Aadhaar cardholder.

What is Aadhaar authentication?
Aadhaar “authentication” means the process wherein a 12-digit unique Aadhaar number, along with other attributes, including biometrics, are submitted to the Central Identities Data Repository (CIDR) for its verification on the basis of information or data or documents available with it. In this way, it helps to remove the issue of duplicity and false identity.

The Aadhaar number has three characteristics:

a) Permanency: The Aadhaar number remains the same during the entire lifetime of a person.

b) Uniqueness: Each Aadhaar number has a unique ID

c) Global: The same number can be used across domains and in various applications.

Authentication of Aadhaar usually happens through either one of these- Biometric (FP/Iris/Face) data, or OTP. It’s a mechanism built to provide services efficiently for all Aadhaar cardholders.

The growing number of cell phone subscribers in India has also led the government to launch the facility in the form of a mobile application known as “mAadhaar” for easy accessibility, available both on android and iOS. Once the phone number is linked to Aadhaar, the application provides TOTP – a time-based one-time password that is always available on the app for 30 seconds and then refreshes with a new number and in this way eliminates the process of waiting for OTP to appear on the phone.

Benefits of Aadhaar authentication
Aadhaar number helps to prove identity to public and private agencies and therefore services like bank account opening, applying for passports, applying for LPG connection, etc converts into a shorter turnaround time. Recently, popular monetary transaction applications such as UPI and BHIM support Aadhaar authentication that makes purchases between merchants and consumers easy and secure. Aadhaar data is stored in state-of-the art secure digital platform and hence there is no loss of data and documents. Aadhaar is one of the Officially Valid Documents (OVDs) prescribed by PMLA for KYC and hence reduces loads of paperwork.

Aadhaar-based authentication launched by UIDAI is designed to create a hassle-free online process to validate Aadhaar data or to download an Aadhaar record, also known as Aadhaar based eKYC. Almost all leading banks, financial institutions etc. have registered for Aadhaar based eKYC. SEBI has also permitted all market infrastructure institutions to perform Aadhaar based eKYC.

(The author is Managing Director & Chief Executive Officer, CDSL Ventures Limited. Views are his own)

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Source: How Aadhaar-based eKYC authentication is making transactions easy and secure

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