India’s audacious plan to bring mobile payments to the masses: pair them with a national ID card
For
three years now India has been rolling out a biometric national ID card
called Aadhar, or “foundation”. It is an apt name. The plan is to issue
one of these to every man, woman and child living in India, with the
stated aim not of surveilling them (the cards are not mandatory)
but for the purposes of improving record-keeping, decreasing corruption
and ensuring that all Indians have access to government services. Debate rages over whether the scheme will fulfil its goals, become a white elephant, or lay the foundation for a dystopic bureaucracy, something India is all too good at.
Despite
the criticism, Aadhar has formed a solid base. Some 440 million cards
have already been issued—just over a third of Indians now have one.
Now the government is expanding its ambitions. Nandan Nilekani, a founder of Infosys
and the man in charge of the Aadhar scheme, suggested last week that
the platform the cards run on will be extended to include peer-to-peer
money transfers. (If you’re in the US, imagine using your social
security number to pay for a cup of coffee.) Nilekani has something
similar in mind for Aadhar. According to Indian tech blog Medianama, this is what he said:
“If I take a cab, I can pay him by sending the payment to the bank account that is associated with the Aadhar number once we expand the authentication capabilities. Aadhar payments were initially just used for government programmes and then we opened it for oil companies and enterprises… We want to create a window for innovative companies.”
The
biggest hassle with payments is information. No one really wants to
hand the keys to her bank account over to everyone who asks. PayPal made
its fortune by sitting between your bank account or credit card and
those of the people you were paying. M-Pesa, Kenya’s famous mobile
payment platform, did the same. And both also make the process simpler,
by replacing several fields of identification with one: your email
address in PayPal’s case and your phone number for M-Pesa.
The
Aadhar card has a similar advantage. With services built on the
platform it provides, third parties can allow people to send each other
money or pay merchants using just a single number. Better still, you
have already been authenticated when you got your card.
From
the state’s point of view, it’s a great way to push non-cash payments
and make online transactions easier. For an individual, it can however
be terrifying. Such a system would make it easier than ever for
governments to monitor flows of money.
