New Delhi, Sep 28: In the wake of the Supreme Court's verdict barring private companies from using Aadhaar, digital payment companies want the government to introduce legislation that will allow them access to the biometric database. Fintech start-ups and digital payment companies would use Aadhaar for customer verification. However, the industry is expected to be affected by the apex court's judgment.

Members of the Payments Council of India (PCI), an umbrella body of all digital payments companies in India, will hold a meeting today ahead of their formal approach to the central government. They fear KYC (know-your-customer) cost will go up as they will have to do a physical verification. The development comes after the Supreme Court's verdict that struck down Section 57 of the Aadhaar Act. Full Text: Aadhaar Verdict by Supreme Court.

“That portion of Section 57 of the Aadhaar Act, which enables body corporate and individuals to seek authentication is held to be unconstitutional,” a five-member constitution bench said on Wednesday, barring private companies from seeking Aadhaar data. Section 57 allows the use of the unique ID for establishing the identity of an individual for any purpose, whether by the state or corporate or person. Aadhaar Verdict: List of Services for Which UIDAI Number Is Mandatory and for Those It’s Not.

“We expect to find a way to get payments companies to use the Aadhaar database for doing e-KYC (know-your-customer) and e-signatures, while taking into consideration the privacy concerns as identified by the apex court. We also expect that the government still has the scope to formulate a law in this regard," chairman of the PCI, Vishwas Patel, told The Mint. Industry experts expect an increase of Rs 100 per person in the cost of verification.

“Going back to the traditional way of verification of customers is riskier than the Aadhaar-based one. It will lead to misplacement of physical copies of identity proofs of customers which is a greater threat to privacy," Patel said.

The Supreme Court on Wednesday by a 4:1 majority judgement upheld the legality of Aadhaar for use only in government-funded social benefit schemes and PAN and Income Tax Return (ITR) while junking its requirement for mobile phone connections, bank accounts, school admissions and competitive examinations. The top court said that there would not be sharing of data with individuals and the corporate entities.

(The above story first appeared on LatestLY on Sep 28, 2018 10:21 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).