Never miss a great news story!
Get instant notifications from Economic Times
AllowNot now

You can switch off notifications anytime using browser settings.


Stock Analysis, IPO, Mutual Funds, Bonds & More

New eKYC charges a double whammy for companies using eSign

Citing the plight of early-stage firms who use eSign for fin documentation, industry executives say agencies need to sit together and rationalise pricing for clubbed services.

, ET Bureau|
Updated: Mar 11, 2019, 08.58 AM IST
ThinkStock Photos
E-payment (TS) 1200 copy
Mumbai-based IDfy, an eKYC service provider, fears that early-stage entrepreneurs could be affected.
BENGALURU: The revised pricing suggested by the Unique Identification Authority of India for eKYC transactions is bound to sharply increase operational costs for companies using the architecture for electronic signatures (eSign) of documents.

According to industry executives in the business of authenticating documents, it could cause problems for early-stage tech companies who use eSign for financial documentation or for human resource onboarding.

While eKYC will be charged at Rs20 per transaction as per the latest gazette notification, for electronic signatures, which use the eKYC framework, charges could become as high as Rs25 per transaction, post the move. Previously, eSign by itself was charged at Rs5 per transaction.

At a technical level eSign, which allows multiple parties to come together and sign a document electronically, uses eKYC as a means of authenticating the parties as per provisions in the Information Technology Act, 2000.

“When eKYC is happening clubbed with eSign there is a need to relook into the pricing, Rs25 for electronic signature for every document becomes too much,” said Sanket Nayak, founder of Digio, which provides eSign facilities for financial institutions and others. “There is no debate around the need for pricing eKYC services, but I think the government agencies need to sit together and rationalise the pricing for clubbed services.”

Nayak said he intends to build an industry wide consensus around the issue and reach out to the Controller of Certifying Authorities (CCA) requesting it to discuss with the UIDAI and sort out the matter.

Another eKYC service provider, Mumbai-based IDfy, also fears that early-stage entrepreneurs could be affected. It may be pointed out that the entire Aadhaar India Stack platform was conceived as a free-to-use beneficiary platform for companies and customers. While charging to a certain extent is understandable, the range needs to be in tandem with the services offered.

“I think what people will also realise is that for most use cases, eSign is not really needed, so either the architecture of eSign will change to allow alternatives to eKYC or eSign will become redundant,” said Wriju Ray, cofounder of IDfy. Larger banks and fintech companies that rely on paperless processes to reduce cost of operations, however, do not mind the added price since the alternative is paper documentation.

“This move by UIDAI solves the ambiguity around eSign, that’s the first positive. Secondly, while it is true that our cost will go up, what it gives us is higher operational efficiency which is what I am okay with, since the alternate is physical signatures which makes the entire process cumbersome and expensive,” said Nithin Kamath, CEO, Zerodha.

Also Read

Soon, non-banking companies may verify via eKYC

The future of Aadhar and eKYC-based solutions

Telcos prefer QR code verification, say Aadhaar eKYC costly

Aadhaar-based e-KYC to boost user adds for telcos: Experts

With customers’ nod, banks keep using Aadhaar for e-KYC

Add Your Comments
Commenting feature is disabled in your country/region.
Download The Economic Times Business News App for Live Elections News & Results, Latest News in Business, Share Market & More.

Other useful Links

Follow us on

Download et app

Copyright © 2019 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service