The Unique Identification Authority of India (UIDAI) had classified entities as local and global authentication user agencies when it came to accessing Aadhaar database.
Now, based on feedback and security audits,
it has been found that not all mobile wallets have the required security protocols to protect their database.
This is the reason that 90% of all mobile wallets have been banned from accessing Aadhaar database, and now, they will have to rely on other means and sources to complete KYC of their users.
UIDAI, the nodal authority on Aadhaar has issued a letter last month, which stated ” Some entities required to verify clients with Aadhaar number may not have the requisite security systems needed to use or store these numbers and have been precluded from the list of global AUAs.”
According above statements Mobile Wallets apps like Mobikwik, PhonePe, and others won’t be able to use Aadhaar for KYC. Paytm is not banned from accessing the Aadhaar database, as UIDAI is satisfied with their security protocols.
Users can use virtual AAdhaar card number to do the authentications for KYC.
This ban would be effective July 1st.