Growth of Aadhaar Based Payments - Chart Of The Day 23 May 2017 - Equitymaster

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Growth of Aadhaar Based Payments
May 23, 2017

At the centre of the government's push for Digital India is the Aadhaar ID. The unique biometric identification can drastically reduce corruption in welfare schemes and enable digital payments.

As per an article in the Economic Times, Aadhaar enabled payments have jumped more than 3.5 times in the last year!

This is proof of the enormous scope of the UID initiative. More than 300 million unique beneficiaries have availed of the Aadhaar Enabled Payments System (AEPS) in less than five years.

The data reveals that more than 600 million transactions have been done already. But this is just the start.

The nodal agency UIDAI, is building capacity to process 100 million transactions daily. That works out to 3.65 billion transactions in a year. In FY17, the rate was just 1.26 million transactions per day. This puts the chart above in proper perspective.

But this growth brings with it several risks. Foremost are the infrastructure and security issues.

The recent leaks of Aadhaar based information came as a rude shock to many. But it was only to be expected. The government has outsourced the work of building the eco-system around Aadhaar to various private individuals and companies. In the process, it is no longer in control of the security of the data.

The woes surrounding the infrastructure enabling Aadhaar has been well documented. We believe the infra issues will be sorted out over time but the security problems will remain.

The biggest risk for the government in its digital India drive will be losing the trust of the common man when it comes to digital transactions, including welfare payments, due to security issues.

Data Source: Economic Times

This Chart Of The Day was published in The 5 Minute WrapUp - Are Firms like Maruti & ONGC Sitting Ducks Against Disruption?

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