National Payments Corporation of India (NPCI) has given an official notifications and alerted to all banks, ordering them to stop all Aadhaar transactions, which are done via
Unified Payments Interface (UPI) and Immediate Payment System (IMPS) platforms.
Unified Payments Interface (UPI) and Immediate Payment System (IMPS) platforms.
This immediate ban on Aadhaar powered cashless payments has been approved by a steering committee, which includes 18 banks and non-bank financial entities such as State Bank of India, HDFC Bank, Citibank, Maharashtra Gramin Bank, One Mobikwik Systems and Paytm Payments Bank.
Aadhaar Payments Have Been Banned :-
‘Pay to Aadhaar’ is an additional feature for users of IMPS and UPI based payment platforms. When a user click on ‘Pay to Aadhaar’, the money can be instantly transferred to any Aadhaar number.
Once the money is transferred, the bank account linked with that Aadhaar can retrieve the money, or use it for other cashless transactions.
Pay To Aadhaar facility has been ordered to be banned starting August 31st, 2018.
The notification from NPCI said, “All member banks should remove this functionality both as remitter and beneficiary. Also, all interfaces currently offering this functionality, such as UPI apps and third-party apps, should remove this option from their respective apps by August 31, 2018,”
Why Aadhaar Based Payments Is Being Stopped :-
The Aadhaar number is directly linked with the bank accounts, and as per NPCI, this can pose a security threat to all users.
We have already reported how Aadhaar numbers are being leaked online, and data is spread everywhere. Govt. has already banned putting Aadhaar data online.
Now, when a Aadhaar Pay payment is initiated by the user, the corresponding bank details of the Aadhaar number is retrieved from a centralized mapper, which is maintained at NPCI’s end for routing the transaction.
In case any Aadhaar linked number is leaked, then chances are very high that the corresponding bank account details can be also hacked.
Most probably, NPCI wants to avoid this.
NPCI said, “Aadhaar number is a sensitive information and the revised framework about its usage in the payment landscape is still evolving.”
The issue related with Aadhaar and privacy of data is currently being heard at Supreme Court. Until a final verdict comes, and issues related to data security is sorted, NPCI is expected to continue the ban.
