Aadhaar verdict: Banks, firms fear rising costs of acquiring new clients

Without the e-KYC provision, the cost of acquiring new customers will shoot up significantly, in some cases six times, claim expert

Getting new clients on board will be more expensive now, feel financial technology (fintech) firms, after the Supreme Court (SC) on Wednesday struck down Section 57 of the Aadhaar Act. 

This section earlier allowed them to ask for a customer’s biometric identification number for electronic-Know Your Customer (e-KYC) verification. Most fintech business models revolve around acquiring a high volume of customers who mostly do low-value transactions.

Without the e-KYC provision, the cost of acquiring new customers will shoot up significantly, in some cases six times, claim industry insiders and experts.

“Private companies can’t mandate customers to provide Aadhaar (number) for on-boarding anymore,” said