In just four years, Aadhaar, also known as India’s “Unique Identification Number”, has registered the identity of 750 million of its citizens, with both the said 12-digit number, and biometrics elements.
You could compare this massive result to another social network, and startups are now looking at tapping this vast database.
What is Aadhaar exactly?
- A 12-digit unique identification number, strengthened by a fingerprint and iris scan of citizens for increased authenticity and security
- A voluntary enrollment, largely incentivized to make subsidies and national health welfare bonds move faster and without middlemen (and corruption)
Some stats to assess the scope of the Aadhaar project:
- $555m budget between 2009 and 2013 (when they reached 500 million people enrolled), and $377m voted since PM Modi was elected in 2014, for the 2014-2015 enrollment and maintenance package.
- Launch of the project in 2009, reaching 394m Indian citizens enrolled on Aadhaar in April 2013, 700m in November 2014, targeting a billion this year in 2015. That’s 1m card issued every day.
Aadhaar: a unique identity for a more efficient welfare state and increased financial inclusion
Indian residents don’t have an ID card as such. Part of them have driving licenses and passports, but it still leaves about half a billion people with no formal document to identify themselves.
It’s not only a problem for the administration. Without a formal proof of identity, a lot of services, from banking to government subsidies, are not available for people, who need to find alternatives, usually more expensive.
Nandan Nilekani, the founder of one of India’s largest tech company, Infosys, makes the precision in an interview to Knowledge @ Wharton: “Their Aadhaar numbers will free them from the “poverty premium” — or bribes — they pay to access everything from food, jobs and loans to cell phones”.
As a consequence, the Aadhaar Unique Identification Number was originally designed both to avoid duplicates (through biometrics, on top of the unique number itself), and to allow the Public Distribution System, a package of welfare aid, to be better dispatched by cutting the middlemen.
It’s also a matter of financial inclusion. Today, 5% only of Indian residents pay an income tax.
Just like other emerging markets such as the Philippines, banks have little incentive to enroll poor people who usually have no capability for savings.
By sending subsidies to recipients in a more direct way through Aadhaar, banks have an interest to open accounts for more people, all the more as the identity of recipients will be certified.
Identity as an infrastructure, thanks to a standard model for different partners
The beauty of such a big database, if we may say, also lies in the network of partners it has created both to enroll new users into the database, and then to deliver custom services by segments through a unique identification system.
In the same interview, Nandan Nilekani says a lot of work has been done to convince different industries to find a common standard for an improved usability, and the ability to scale: “the enrollment station behaves in the same manner, wherever it is. Whether you are enrolling a worker for NREGA [an employment guarantee program under the National Rural Employment Guarantee Act] in a village in Bihar or you are enrolling a customer in a bank in Nariman Point [in Mumbai’s financial district] or you enrolling an LPG [liquefied petroleum gas] customer for an oil company in Mysore [near Bangalore], the enrollment process all three of them follow is identical. So, creating the “templatized,” standardized software and process is actually the key to scalability.”
It’s a winning situation both for the government, who can then tap into a network of enrollment stations in very different situations, as well as for each partner, who can have a partial access to the database, clean-up the duplicates, and improve its efficiency through data.
This net is key, not only because the country is so big, but also because 120 million Indians are migrants, and so far it has been hard to identify them, as well as their needs and how governments could improve their relationship.
Sanjay Swamy, who used to work for Aadhaar and is now a Managing Partner at AngelPrime and chairman of ZipDial, a mobile marketing startup acquired by Twitter (see wrap-up by Forbes), says that “the architecture of Aadhaar makes it an enabler not just for benefits administration, but also fundamental infrastructure for the future of any and all services in the country.”
Sanjay also shows the case study of someone willing to open a bank account.
So far, typical steps would include to visit the bank, fill out opening forms, submit documents to prove the ID and address, and both the bank and the telco would take time to verify all the submission.
Tomorrow with an Aadhaar-enabled KYC system, you would visit a bank with an Aadhaar certified biometric terminal (basically a mobile phone or a tablet or a PC with a fingerprint scanner and an Internet connection).
Type in your 12-digit Aadhaar number and put your finger on the fingerprint scanner.
Your fingerprint is encrypted and sent to the UIDAI servers for verification.
If your fingerprint matches the fingerprint provided at time of enrollment, you are successfully authenticated, and your demographic data and photograph are released to the bank.
If your fingerprint does not match, the system will simply say “Authentication Failed – fingerprint and Aadhaar Number do not match. In such cases, no data will be returned to the bank.
What could be done with Aadhaar: 5 examples and a hackathon
On December 6th, 2014, Khosla Labs (founded by Indian-born American tech giant Vinod Khosla, co-founder of Sun Microsystems) has organised the first ever Aadhaar hackathon, proving if needed that it’s not just a huge administration effort, but also a new API to play with.
Yes, it does mean that an ecosystem of developers will soon use the infrastructure provided by this identity platform to build services ranging from payment to financial inclusion or even ERPs, just like you have an ecosystem of developers on iOs, Google Play or Facebook to name a few.
India, via its network of Indian Institutes of Technology, the most competitive graduate schools you could try to get in, has legions of smart and creative people to create something new, unique, and tailored for this emerging market. This is going to be a hit, with a strong fit for emerging markets.
Immigration, security, e-commerce: use cases for Aadhaar
In another article, Quartz shows 5 existing or possible applications for Aadhaar in and out of India:
- A faster immigration desk. Upon arrival at Heathrow, Indian residents with Aadhaar could go through the controls with a simple iris scan, way faster than going through the line and stamp process. It’s already in Beta.
- Faster controls in Indian airports. Whoever has flew to or in India knows the severity, and number, of check-points. No lesser than 6 or 7 times I have been controlled before leaving Bangalore. Same thing, with Aadhaar, part of these controls could be simplified.
- Double verification for high payments. For wealthier people, an Aadhaar quick check (fingerprint or iris, to be sure) could raise the payment limit bank often have. Say you want to buy a big 4k TV. Even if enough money on the bank, your payment could be refused. A double check can be a good way for your bank to authenticate you and proceed with the payment.
- No more card-based ATMs? Why bear a card you can easily lose, AND a pin you can forget? With a fingerprint or iris scan, again, new ways to withdraw money could be tested.
- E-commerce authentication with iris. Same goes with e-commerce vendors, or even MOOC providers who need to assess the student’s identity for exams. An iris scan – possible from 1.2m megapixel – could be done by webcam to authenticate the buyer.
Today, the Aadhaar API can take up to 100m calls for verification per day, as well as 10m e-KYC transactions per day.
It will be exciting to follow the different services which developers will create around Aadhaar.
Hurdles exist of course, from privacy issues to suspicions to the cost of such a program, still, the numbers are there, and the way it has been managed, and now amplified through hackathons, with a dream team from day 1 is clearly encouraging.