Indian public concerned about fingerprint payment scheme

The blog post by Rawlson King was published by Biometric Update.com on February 9, 2017. Sumandro Chattapadhyay was quoted.

The Centre for Internet and Society says that many Indians are concerned about the “privacy implications” of using Aadhaar as a payment scheme.

Aadhaar is the 12-digit unique identification number issued by the Indian government to every individual resident of India. The Aadhaar project aims to provide a single, unique identifier which captures all the demographic and biometric details of every Indian resident. Currently, Aadhaar has issued over 900 million Aadhaar numbers. BiometricUpdate.com recently reported that over one billion people have now been enrolled.

The Indian government is intent on expanding the use of Aadhaar beyond the provision of social services to include financial transactions. The government’s “Digital India” initiative aims to create a “cradle-to-grave digital identity” that can enable a digital economy. Moving towards a digital economy will allow low income people to access the banking system. The use of Aadhaar for most transactions however would also allow the government to reduce the cash supply, which would work to eliminate untaxed cash transactions.

The government took a big step towards reducing the cash supply last November by removing 500 and 1,000 rupee notes, thereby eliminating 85 percent of the country’s circulating currency. Indian residents responded by setting up three million, enabled by fingerprint verification. BiometricUpdate.com has reported that banks, including DCB Bank, have introduced Aadhaar enhanced services, and that financial service firms including YES Bank and Spice Money are introducing Aadhaar-enabled payment systems.

The unveiling of this biometric-based payment ecosystem however is creating consternation among the general public. Sumandro Chattapadhyay, a director at the Centre for Internet and Society told the Guardian that Indian residents are concerned about the “data-sharing possibilities opened up by Aadhaar.”

He noted that Aadhaar “makes it easier for companies not only to share information on individuals’ consumption and mobility habits, but also to link this data up with public records like the electoral register. Both lead to significant threats to privacy of individuals.”

Chattapadhyay also told the Guardian that “the law governing use of the biometric database, fast-tracked through parliament last year, is flimsy when it comes to the private sector. Since India lacks a general privacy or data protection law, this leaves corporate use of Aadhaar services effectively unregulated.”

He told the UK newspaper that his greatest fear is that “private companies could eventually gain access to government-held personal data, such as income or medical records, while the government could use company data like phone records to target specific individuals in political campaigns.”

Despite these fears, the government continues to move ahead with link Aadhaar with more elements of the financial system. Recent reports have stated that the Indian government may allow citizens to use Aadhaar to file their income tax returns.