News Flash: Aadhaar Drives Digital Inclusion in India 

Report says the biometric identity system is enabling more and more digital transactions

In 2019, 2.3 billion digital financial transactions were enabled by Aadhaar, India’s national biometric identity system, an increase of 12 per cent from 2018, according to an article by Livemint, citing a report by payments company Worldline India. The value of the transactions reached 1 trillion (US$13.5 billion) in 2019, representing year-over-year growth of 31 per cent.

Aadhaar’s simplicity and minimalism have helped the ID system to successfully cover more than 1.25 billion people, according to Pramod Varma, the Chief Architect of the programme.   Aadhaar has focused on collecting just a few parameters, whereas other countries are attempting to store more than 50 parameters from multiple sources “leading to bureaucratic tangles”, he told the Future of Work conference, according to a report by Inventiva. At the same time, a minimalist approach helps to design in privacy and security, Varma added. He also highlighted the fact that Aadhaar did not invest in field infrastructure, preferring to build a strong, secure and scalable backend exposed via APIs (application programming interfaces) that could be accessed by third parties.

Wrapping up his talk, Varma provided a list of key learnings from the implementation of Aadhaar, which included: “Think unified, not uniform. Your solution should have the ability to create and coexist diverse solutions on shared infrastructure” and “adopt open standards and open source, because openness eventually wins.” Inventiva reported that Aadhaar, which has now enabled more than 33 billion authentications and more than 7.5 billion electronic know-your-customer transactions, has helped increase financial inclusion in India to 80 per cent in six years. In 2008, just 17 per cent of the population had bank accounts, the report said.

To read the Inventiva article click here and to read the Livemint article click here.