India Stack is the key technology platform that could transform India into a cashless economy

With India Stack and its set of APIs, developers could implement the need of the Government to move towards a cashless economy.

The sudden demonetisation of high value currency notes might have come as a shock, but the Government has been working towards making India a cashless economy for at least seven years. The India Stack is a set of APIs that allow governments and private companies to deploy cashless and paperless technology products. The stack comprises of APIs that are independently maintained by their owners, but the India Stack as a whole drives adoption by developers by organising events.

The Aadhaar card is the main enabler for these services, allowing easy authentication and supporting cashless transactions. Documents stored in a digital locker allows companies to quickly give customers insurance coverage, allow customers to invest in mutual funds, and give out education loans to students. With Aadhaar card, e-KYC and e-Sign, Reliance Jio is able to provide customers with sims in under five minutes, a process that took anywhere between three to five days. This is a better experience for the customer.

The stack consists of UIDAI, a unique identification number that is linked to biometric readings of the individual. Aadhaar is the world's largest national identity project. The e-KYC project was added to Aadhaar based on industry feedback. This allows companies and organisations to get instant verification of customers along with date of birth and residence address. The National Payment Corporation of India developed the Aadhaar Enabled Payments System (AEPS). AEPS improves financial inclusion, allows small retail outlets to go cashless, allows disbursement of government entitlements, facilitates bank to bank fund transfer in a safe manner, and is the foundation for a full range of banking services.

The National Payment Corporation of India also launched and maintains the Unified Payment Interface. The UPI system allows for both a pay request, where a customer sends funds to a beneficiary, and a collect request where a customer can request payment from a remitter. A virtual id is used to process the transactions, which is similar to an e-mail address. Adoption of UPI is important to get India to trade and transact digitally.

eSign is an API to facilitate Aadhaar card holders to digitally sign documents. The authentication supported is through biometric readings or a one-time password. The eSign API hopes to remove a lot of paperwork from the authentication process, as well as provide a legally valid signing mechanism. eSign is managed by the Controller of Certifying Authorities, a part of the Ministry of Electronics and Information technology. DigiLocker is a Government of India repository for documents. Users sign up for the service, link to Aadhaar card, upload their documents, eSign them, and share the documents on request.

UIDAI, e-KYC, AEPS, UPI, eSign and DigiLocker form the India Stack. There are four layers in the stack, the consent layer, the cashless layer, the paperless layer and the presence less layer. Each layer is designed to operate independently of the others. The APIs can be used for any kind of hardware, from desktops, to mobile phones, to wearables. Access to each API requires a sign up for that particular service, and there are various payment models.

Image: India Stack

Image: India Stack

Work is ongoing for creating a consent architecture for the consent layer, to support the already existing services. The plan is to allow consumers to give access to specific personal data from the other three layers, on demand. Similar to the eSign system, the consent will be valid for a limited time, and supported with biometric identification. In the India Stack, the Aadhaar Card holder has the ultimate control over who gets access to personal data, and what kind of data is allowed to be accessed.

The cashless layer of the India Stack is meant to ease the process of digital financial transactions, as well as reduce costs. UPI speeds up the process of fund transfer, and acts as a bridge for financial transactions between any two entities. The cashless layer is intended to be simpler to use than the applications provided by banks, and has had a considerable impact on the Indian financial system. A summarised/ sanitised version of your transaction history can be send to organisations to judge credit worthiness.

The paperless layer is meant to reduce the amount of paperwork and streamline processes. The paperless layer reduces fraud, eases administrative burdens, and allows users to access their documents at any time, without having to physically carry them around. Document bundles can be compiled into packages, which provide a particular solution. For example, a commonly requested package is the "proof of address" document bundle. The paperless layer reduces the cost of customer acquisition, enabling more people to be financially included.

The presence less layer is meant to ease up processes by not requiring people to be physically present for a procedure. When an organisation wants to verify the identity of a customer, the bank only needs to collect biometric information (such as a fingerprint or an iris scan, supported on some phones), and send it to the database of the Government for verification. This means that customers no longer have to present identification cards for proof. A potential application is rapid check in to airports.

The Indian Software Product Industry Round Table (iSPIRT) helps with the creation of the APIs by suggesting the technical standards to be followed and advising the creators of the APIs on the specifications. iSPIRT helps with the popularisation, evangelisation, and adoption of India Stack. iSpirit creates web hangouts, holds hackathons, and representatives speak at various forums in efforts to increase the adoption of India Stack.

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