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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.
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]
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.
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]
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]
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]
Financial Times in an article raised concerns around privacy and data protection. [18]
A smart card (SC), chip card, or integrated circuit card, used to control access to a resource. It is typically a plastic credit card-sized card with an embedded integrated circuit (IC) chip. Many smart cards include a pattern of metal contacts to electrically connect to the internal chip. Others are contactless, and some are both. Smart cards can provide personal identification, authentication, data storage, and application processing. Applications include identification, financial, public transit, computer security, schools, and healthcare. Smart cards may provide strong security authentication for single sign-on (SSO) within organizations. Numerous nations have deployed smart cards throughout their populations.
Biometrics are body measurements and calculations related to human characteristics. Biometric authentication is used in computer science as a form of identification and access control. It is also used to identify individuals in groups that are under surveillance.
Digital identity is the phrase referring to the data that computer systems use to represent external agents, which can be individuals, organizations, applications, or devices. For individuals, it involves the gathering of personal data that is essential for facilitating automated access to digital services, confirming one's identity on the internet, and allowing digital systems to manage interactions between different parties. It is a component of a person's social identity in the digital realm, often referred to as their online identity.
Gemalto was an international digital security company providing software applications, secure personal devices such as smart cards and tokens, e-wallets and managed services. It was formed in June 2006 by the merger of two companies, Axalto and Gemplus International. Gemalto N.V.'s revenue in 2018 was €2.969 billion.
Aadhaar is a 12-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 2009 by the Government of India, under the jurisdiction of the Ministry of Electronics and Information Technology, following the provisions of the Aadhaar Act, 2016.
The National Payments Corporation of India is an organization that operates retail payments and settlement systems in India. The organization is an initiative of the Reserve Bank of India (RBI) and Indian Banks’ Association (IBA) under the provisions of the Payment and Settlement Systems Act, 2007, for creating a robust Payment & Settlement Infrastructure in India.
Biometrics refers to the automated recognition of individuals based on their biological and behavioral characteristics, not to be confused with statistical biometrics; which is used to analyse data in the biological sciences. Biometrics for the purposes of identification may involve DNA matching, facial recognition, fingerprints, retina and iris scanning, voice analysis, handwriting, gait, and even body odor.
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.
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.
Aadhaar eSign is an online electronic signature service in India to facilitate an Aadhaar holder to digitally sign a document. The signature service is facilitated by authenticating the Aadhaar holder via the Aadhaar-based e-KYC service.
Unified Payments Interface, commonly referred as UPI, is an Indian instant payment system 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 the 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.
BHIM is an Indian 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. It was named after Dr Bhimrao Ambedkar.
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.
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 Reserve Bank of India under second schedule of RBI Act, 1934.
PhonePe is an Indian Multinational 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.
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.
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.
National Automated Clearing House regional ECS into one National Payment System, is claimed to be better than its predecessor, Electronic Clearing 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.