What is eKYC and How it Works? (Simple Terms)
What is eKYC – eKYC is a paperless Aadhaar based verification process. eKYC full form is Electronic – Know Your Customer. Now in this article I will explain the details on what is eKYC process and how verification steps evolved from KYC to eKYC.
eKYC is the paperless KYC process in which your Identity and address will be verified through Aadhaar based KYC process. First we will let you know how the traditional KYC process works and how we evolved from KYC to e-KYC.
How traditional KYC Process Works?
Before the existence of Aadhaar in India, for getting any official verification process you need to submit any of your document hard copy (ID Proof and Address Proof). They will manually verify and proceed with the grant if everything seems good. For almost all services like opening a bank account, getting a SIM card, land registration etc., this traditional process was followed earlier.
But once Aadhar is introduced as a single point verification method, most of the service organisations shifted their verification process from KYC to eKYC.
What is eKYC?
eKYC is tightly coupled with Aadhaar. Aadhaar is a 12 digit unique identification number given to residents of India using their bio-metric and geographic data. Aadhaar is made compulsory by the Government of India to avail most of the services.
All your data that you have submitted at the time of getting an Aadhaar card will be stored in UIDAI database. This is under the control of Unique Identification Authority of India (UIDAI). For getting authorised to use this data, every service provider need to contact UIDAI and get an approval.
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Aadhar e-KYC Verification Process:
There are two authentication processes to get individual’s data from UIDAI database. Organisations which are planning to get the data from UIDAI database needs to authenticate with either OTP verification or using Bio-metric method.
Following are two methods and how each one works explained in simple terms.
Method 1: eKYC verification using OTP:
To perform verification process (eKYC) using method, customer has to link their Aadhaar number with mobile number. If they haven’t linked registered mobile number with Aadhaar, then you need to choose the second method mentioned.
- Enter the Aadhaar number and other details if required
- UIDAI will generate an OTP and send to your registered mobile number
- Once you provide that OTP you’ll receive to your mobile, UIDAI will allow to access your personal data that is associated with Aadhar number
You can use these details to verify the customer and provide them with the required documents.
Method 2: eKYC verification using Biometric Thumb Impression:
Another alternate method to verify the customer details is to get the customer’s thumb impression in Aadhaar based bio-metric scanner. Once we got the fingerprint details, then look up for which Aadhaar number these fingerprint details linked to.
- Visit your nearest service provider store. They will be having biometric machine
- Provide your thumb impression to that device
- Now the machine will cross check the thumb impression details with Aadhaar linked thumb impression data
- If everything matches, then UIDAI will provide access to that particular person’s details.
You need to be present at the service organisation’s store for this method and have to give your fingerprint.
Differences between KYC and eKYC?
- eKYC is full secure but KYC is prone to loss of information
- KYC process takes few weeks to verify the details where as eKYC verification can be done in the span of seconds
- eKYC is paperless process. In contrast KYC process requires you to submit all the verification documents
- Cost involved for verifying the details in KYC process is more
- eKYC eliminate frauds and useful in providing instant approvals
Where eKYC is Required?
- Telecom services / Mobile service providers – to get a SIM card
- Banking & Finance sector
- PayTM like services
- Mutual funds investment services
- Government sector
eKYC is the one time process that most of the service providers follow to verify their customer details. Traditional KYC process is very time consumer yet may not provide accurate results. So introduction to eKYC can eliminate issues like document forgery, frauds etc and ensures verification is done instantly.
eKYC process is very simple and verification using Aadhaar KYC is instant process. You don’t need to wait for weeks to get the verification done.
I’m concluding this article on eKYC full form, what is eKYC, eKYC process and how it works. If you still have any queries on eKYC method, do comment on the below comment box. We will help you in clarifying your queries. Cheers!