India Stack

Last updated

India Stack refers to the project of creating a unified software platform to bring India's population into the digital age. Its website describes its mission as follows: "India Stack is a set of open APIs that allows governments, businesses, startups and developers to utilize a unique digital Infrastructure to solve India’s hard problems towards presence-less, paperless, and cashless service delivery" [1] Of the four "distinct technology layers" mentioned on the same page, the first, the "Presenceless Layer" is the most controversial as it involves storing biometric data such as fingerprints for every citizen. Since such markers are widely being adopted to enable cashless payment, the issue arises of fraudulent use of biometrics. [2] The other layers are the Paperless Layer, which enables personal records to be associated with one's online identity; the Cashless Layer, a single interface to all national banks and online wallets; and the Consent Layer, which aims to maintain security and control of personal data.

Contents

India Stack is the largest open API in the world. Since its deployment, India has been organizing hackathons to develop applications for the APIs. [3]

India Stack is being implemented in stages, starting with the introduction in 2009 of the Aadhaar "Universal ID" numbers. These are linked to biometrics (fingerprints) and as time goes by, authentication by Aadhaar is required for access to more and more services and subsidies. This raises issues of privacy and surveillance, especially as much of the users' interface is via their mobile phones. [4] [5]

The next stages were the introduction of eKYC (electronic Know Your Customer), which enables paperless and rapid verification of address, identity etc., followed by eSign, whereby users attach a legally valid electronic signature to a document, and Unified Payments Interface (UPI) enabling cashless payments, and most recently, DigiLocker, a platform for issuance and verification of documents and certificates.

What raised the profile of Aadhaar and India Stack worldwide was the 2016 Indian banknote demonetisation whereby ₹ 500 and ₹1,000 notes were phased out, officially to eliminate forgeries and money-laundering, but with the secondary objective of hastening the transition to a cashless economy.

Observers have argued that India Stack could fast-track the move to digital payment systems across the developed world and mark the end of cash. [6] However, various challenges related to user rights have been mounted: in August 2017, the Supreme Court of India unanimously ruled in favour of a petition applying for privacy to be declared a fundamental right [7] and other court matters followed. [8]

Reputed consultancy firm Ernst & Young has said that India Stack has become the global benchmark for most countries. [9]

First pilot of India Stack

To test all 4 layers- Presenceless, paperless, cashless and consent- of India stack, the India Stack team partnered with the largest FinTech alternative credit company in India, Capital Float (now axio) in 2016. [10] The objective of the pilot was to provide loans to customers in a few minutes and in the comfort of their own house. Additionally, the target customer was someone with no collateral and limited data trail. When a user opened the application, he/she had to give consent for Capital Float to access his/her data through the digital platform (Consent). Once the consent was given Capital Float used the Aadhaar infrastructure to authenticate the users (presenceless). The Aadhaar also helped with e-KYC, a mandatory requirement for all loan activities in India. Once the authentication was complete, Capital Float pinged the Aadhaar database to check for banking activity, and also used a mobile scraping technique to gather data from the customer's phone. These two steps helped Capital Float estimate the credit-worthiness of the customer. Once this was determined, the customer of the application saw loan offers on the screen. The customer could then select the offer and do an e-signature within the comforts of their home (paperless). This whole process could be completed in 45 seconds. Once the loan was approved it could directly be disbursed into the bank account of the customer (Cashless). The pull function of the UPI platform could also be utilized by Capital Float to get back the loan payments.

After the Pilot, the India Stack team has approached other alternate lenders to utilize the platform to give loans to under-served populations. Capital Float is already in the process of expanding the pilot in to a full-fledged service offering. This pilot proved a clear value proposition of the India Stack platform for the fintech industry.

India Stack Developer Conference

First conference was held on 25 January 2023. NASSCOM president Debjani Ghosh highlighted that India Stack has enabled India to achieve financial inclusion for 80% of population in 6 years as compared to projected figure of 46 years. [11] Indian Minister said that the platform will be offered to other countries and private entrepreneurs free of cost. [12] Earlier India Stack Knowledge Exchange 2022 had taken place in July 2022, where Indiastack.global was launched by Indian PM Narendra Modi as a single repository of all major projects on India Stack. [13]

Components under IndiaStack

Endorsement by IMF

International Monetary Fund endorsed this initiative by noting that: "Other emerging market and developing economies could learn from the experience." [14] In a paper titled India’s Approach to Open Banking: Some Implications for Financial Inclusion, authors Yan Carriere-Swallow, V. Haksar and Manasa Patnam observed that the digital infrastructures of India Stack has enabled rapid increase in digital payments. [15]

Global Collaboration

Sri Lanka, Morocco, the Philippines, Guinea, Ethiopia, and the Togolese Republic have already started using technologies of India Stack and Tunisia, Samoa, Uganda, and Nigeria have shown their willingness. [16] [17]

Concerns

Financial Times in an article raised concerns around privacy and data protection. [18]

See also

Related Research Articles

<span class="mw-page-title-main">Aadhaar</span> Indian national identification number

Aadhaar is a twelve-digit unique identity number that can be obtained voluntarily by all residents of India, based on their biometrics and demographic data. The data is collected by the Unique Identification Authority of India (UIDAI), a statutory authority established in January 2016 by the Government of India, under the jurisdiction of the Ministry of Electronics and Information Technology, following the provisions of the Aadhaar Act, 2016.

National Payments Corporation of India (NPCI) is an Indian public sector company that operates retail payments and settlement systems in India. The organization is an initiative of the Reserve Bank of India (RBI) and the Indian Banks' Association (IBA) under the provisions of the Payment and Settlement Systems Act, 2007, for creating a robust payment and settlement infrastructure in India.

<span class="mw-page-title-main">Digital India</span> Online infrastructure in India

Digital India is a campaign launched by the Government of India to make its services available to citizens electronically via improved online infrastructure and by increasing Internet connectivity. The initiative includes plans to connect rural areas with high-speed internet networks. It consists of three core components: the development of secure and stable digital infrastructure, delivering government services digitally, and universal digital literacy.

MobiKwik is an Indian payment service provider founded in 2009 that provides a mobile phone-based payment system and digital wallet. Customers can add money to an online wallet that can be used for payments. In 2013 the Reserve Bank of India authorized the company's use of the MobiKwik wallet, and in May 2016 the company began providing small loans to consumers as part of its service.

DigiLocker is a digitization service provided by the Indian Ministry of Electronics and Information Technology (MeitY) under its Digital India initiative. DigiLocker allows access to digital versions of various documents including driver's licenses, vehicle registration certificates and academic mark sheets. It also provides 1 GB storage space to each account to upload scanned copies of legacy documents.

<span class="mw-page-title-main">Unified Payments Interface</span> Indian instant payment system

Unified Payments Interface, commonly referred to as UPI, is an Indian instant payment system as well as protocol developed by the National Payments Corporation of India (NPCI) in 2016. The interface facilitates inter-bank peer-to-peer (P2P) and person-to-merchant (P2M) transactions. It is used on mobile devices to instantly transfer funds between two bank accounts. The mobile number of the device is required to be registered with the bank. The UPI ID of the recipient can be used to transfer money. It runs as an open source application programming interface (API) on top of the Immediate Payment Service (IMPS), and is regulated by the Reserve Bank of India (RBI). Indian Banks started making their UPI-enabled apps available on Google Play on 25 August 2016.

Oxigen Services is an Indian fintech company. It is involved in the micropayment of services and remittances in real time.

Financial technology is an industry composed of companies that use technology to offer financial services. These companies operate in insurance, asset management and payment, and numerous other industries. FinTech has emerged as a relatively new industry in India in the past few years. The Indian market has witnessed massive investments in various sectors adopting FinTech, which has been driven partly by the robust and effective government reforms that are pushing the country towards a digital economy. It has also been aided by the growing internet and smartphone penetration, leading to the adoption of digital technologies and the rise of FinTech in the country

<span class="mw-page-title-main">National Common Mobility Card</span> Indian interoperable transport card

National Common Mobility Card (NCMC) is an open-loop, inter-operable transport card conceived by the Ministry of Housing and Urban Affairs under Prime Minister Narendra Modi's ‘One Nation, One Card' vision. It was launched on 4 March 2019. The transport card enables the user to pay for travel, toll tax, retail shopping and withdraw money.

BHIM is an Indian state-owned mobile payment app developed by the National Payments Corporation of India (NPCI), based on the Unified Payments Interface (UPI). Launched on 30 December 2016, it is intended to facilitate e-payments directly through banks and encourage cashless transactions. The application supports all Indian banks which use UPI, which is built over the Immediate Payment Service (IMPS) infrastructure and allows the user to instantly transfer money between 170 member banks of any two parties. It can be used on all mobile devices.

The National Unified USSD Platform (NUUP), also known as the *99# service, is a platform that provides access to the Unified Payment Interface (UPI) service over the USSD protocol. Initiated by the Government of India and developed by the National Payments Corporation of India (NPCI), it facilitates access to banking services from mobile phones.

<span class="mw-page-title-main">Airtel Payments Bank</span> Indian Payments Bank

Airtel Payments Bank is an Indian payments bank with its headquarters in New Delhi. The company is a subsidiary of Bharti Airtel. On 5 January 2022, it was granted the scheduled bank status by the Reserve Bank of India under the second schedule of RBI Act, 1934.

PhonePe is an Indian digital payments and financial services company headquartered in Bengaluru, Karnataka, India. PhonePe was founded in December 2015, by Sameer Nigam, Rahul Chari and Burzin Engineer. The PhonePe app, based on the Unified Payments Interface (UPI), went live in August 2016.

Paytm Payments Bank (PPBL) is an Indian payments bank, founded in 2017 and headquartered in Noida. In the same year, it received the license to run a payments bank from the Reserve Bank of India and was launched in November 2017. In 2021, the bank received a scheduled bank status from the RBI.

Ujjivan Small Finance Bank Limited is an Indian small finance bank based in Bangalore, which commenced operations on 1 February 2017. Ujjivan Financial Services holds an 80 percent stake in the bank.

<span class="mw-page-title-main">BharatQR</span> QR code payment system in India

BharatQR, developed by NPCI, Mastercard, and Visa, is an integrated payment system in India for mobile device. The system was launched in September 2016. It facilitates users to transfer their money from one source to another. The money transferred through BharatQR is received directly in the user's linked bank account. It provides a common interface between RuPay, Mastercard, Visa and American Express, and is interoperable with all the banks. Currently, BharatQR is supported on both Android and iOS devices.

YONO is an integrated digital banking platform offered by State Bank of India (SBI) to enable users to access a variety of financial and other services such as flight, train, bus and taxi bookings, online shopping, or medical bill payments. YONO is offered as a mobile banking app for both Android and iOS.

Rang De is India's first peer-to-peer online micro-lending platform founded in 2008. It is based in Bengaluru, India.

vcash Defunct Malaysian e-wallet service

vcash was a Malaysian digital wallet and online payment platform established in Shah Alam in November 2017, by Digi Telecommunications, a subsidiary of Telenor Group. vcash allowed users to make payments in local stores via a QR code, pay bills, top-up prepaid mobile phones, and do P2P transfers. Despite being a Digi product, user registration and usage of this service was opened to both Digi and non-Digi customers. Its competitors were GrabPay, Touch 'n Go eWallet, and Axiata's Boost. On 1 November 2019, Digi announced they were discontinuing vcash on 30 November 2019, two years after its launch, which were attributed to stiff competition from competitors that provide rewards to their users to retain customers in their services.

Unified Lending Interface, commonly referred to as ULI, is an Indian digital lending interface. ULI was introduced by Reserve Bank of India to speed up the process of giving loans. It facilitates the flow of digital information, such as land records from various states, directly to lenders. It integrates an open architecture with open Application Programming Interfaces (APIs), allowing various financial institutions to connect in a ‘plug and play’ model.

References

  1. ↑ "India Stack". Indiastack.org. 20 February 2017. Archived from the original on 2017-06-06. Retrieved 2017-06-30.
  2. ↑ "India Utilizing Citizens' Biometrics". Pymnts.com. 20 February 2017. Retrieved 20 February 2017.
  3. ↑ John Mauldin (2017-03-29). "Raoul Pal, Paying Attention | Outside the Box Investment Newsletter". Mauldin Economics. Retrieved 2017-06-30.
  4. ↑ Ramesh, Randeep (16 September 2009). "1.2bn population of India to be given biometric ID cards". The Guardian. Retrieved 21 February 2017.
  5. ↑ "Is India's central database with biometric details of its billion citizens a privacy nightmare?". Mashable.com. 14 February 2017. Retrieved 2017-06-30.
  6. ↑ "India Is Likely To Become The First Digital, Cashless Society". Forbes.com. Retrieved 2017-06-30.
  7. ↑ "Right to Privacy a Fundamental Right, Says Supreme Court in Unanimous Verdict". The Wire. 24 August 2017. Retrieved 19 May 2018.
  8. ↑ "Aadhaar Isn't Just About Privacy. There Are 30 Challenges the Govt Is Facing in Supreme Court". 18 January 2018.
  9. ↑ ey.com/en_in/india-at-100/digitalizing-india-a-force-to-reckon-with
  10. ↑ "ISPIRT & the India Stack pilot - commercialization of techno-creative innovations". 27 October 2016.
  11. ↑ pib.gov.in/PressReleasePage.aspx?PRID=1893704
  12. ↑ "India Tech Stack Adoption to Help Countries Save Billions: Rajeev Chandrasekhar". 24 January 2023.
  13. ↑ pib.gov.in/PressReleasePage.aspx?PRID=1840024
  14. ↑ "The India Stack is Revolutionizing Access to Finance - IMF F&D".
  15. ↑ "India's Approach to Open Banking: Some Implications for Financial Inclusion".
  16. ↑ "India Stack goes global, to be adopted by Sierra Leone to develop Aadhar-like digital ID pilot project - ET Government".
  17. ↑ "World rushes to adopt the 'India Stack' while 'UPI' goes global". ThePrint . 15 February 2023.
  18. ↑ "The India Stack: Opening the digital marketplace to the masses". Financial Times. 20 April 2023.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.