Payment News

Is Aadhaar Unreliable?

Moody’s Investor Service has published a report on ‘Decentralised Finance and Digital Assets’. In it, it has raised concerns that the Aadhaar identification system, which is based on biometric technologies, is unreliable due to India’s hot and humid conditions, resulting in ‘service denials’.

India transfers official welfare benefits such as those from the Mahatma Ghandhi National Rural Employment Guarantee Act (MGNREGA) through the Aadhaar-based payment system (ABPS) to avoid wage payment failures when people change bank accounts. State governments have until the end of the year to adopt ABPS.

Moody’s acknowledges that decentralised ID (DID) systems give users more control of their data, reducing online fraud, but that DID’s bring their own challenges, such as giving the technology owner of social media companies monopolistic levels of influence.