Aadhaar-based payments using face scan yet to fall into place

Mumbai: Aadhaar-based payments through facial recognition, piloted through the Covid peak by the National Payments Corporation of India (NPCI), have failed to take off even a year after its implementation. State Bank of India, Union Bank of India, and Bank of India, large public-sector banks with millions of customers, have not implemented the project as they want Aadhaar's administrator to make a desktop or laptop version of the service.

"The reason payments through face authentication has failed to take off is because only 23 banks are currently offering this service," said a banking industry official. "Public sector banks have asked for a web-based solution, which the UIDAI is still developing."

Presently, UIDAI (Unique Identification Authority of India) has developed a mobile application to allow payments through facial recognition. Since PSU banks have invested heavily in kiosk banking, they want UIDAI to offer a web-based solution.


SBI is the largest player in the kiosk banking space.

"Purely from a logistics and cost point of view, face authentication makes more sense. It is much cheaper that other forms of payments," said another banking official. "Transactions made through face authentication do not require any hardware-unlike thumb print scans or iris scanners. Iris has failed to scale up as the hardware investment is not worth it. We only have 20,000 iris scanners in the market."

On the other hand, facial recognition only needs a smartphone or other device running Android version 7 and above. Facial recognition is a more advanced technology meant to replace finger print-based and Aadhaar-enabled transactions, where failure rate is close to 20%.

At the end of December 2024, the Aadhaar Enabled Payment System (AePS) processed around 93 million transactions, a marginal rise over the 92 million transactions recorded in November.

The value of transactions also increased marginally to ₹24,020 crore, compared with ₹23,844 crore in November. During the peak of the festive season in October, the volume stood at 126 million and the value at ₹32,493 crore.

In August 2020, NPCI, with the approval of UIDAI, had initiated a test rollout of facial recognition with four leading banks. Those that ran the pilot were ICICI Bank, Yes Bank, RBL Bank and Fino Payments Bank. The pilot was carried out on non-financial transactions in the first phase and then later opened to financial transactions.

The idea was to use this method for Aadhaar authentication of beneficiaries using Jan Dhan bank accounts to access government direct benefit transfer (DBT) payouts and domestic transfers.