So govt will be snooping on all our transactions ! Aadhaar scanner must in card payment units MUMBAI: The Reserve Bank of India has said that all new credit card swipe machines should be fitted with biometric scanners to enable Aadhaar authentication. Bankers say that the directive will push up the cost of card swipe machines by over 30% and may make transactions difficult in places with low bandwidth. RBI has asked banks not just to upgrade the swipe machines but their entire infrastructure to facilitate Aadhaar authentication. However, it has left it to banks issuing cards to choose between 'chip and pin' as a security feature or Aadhaar-based biometric authentication. Historically, credit card transactions were authorized by swiping the magnetic strip on a reader and obtaining the cardholder's signature on a charge slip. However, RBI has insisted cards which are used online or in international transactions should have an electronic chip as a security feature. While the move will push up costs, it will also make it easier for the underprivileged to use cards, promoting financial inclusion. "There is a need to increase card transactions on the payment terminal. This initiative will help drive financial inclusion and government annuity payment transactions and bring convenience to consumers and retailers," said B Amrish Rau, GM First Data MS Asia. First Data is the majority owner of ICICI Bank Merchant Services, which installs PoS machines on behalf of the bank. Upgrading infrastructure for biometric authentication would mean that banks will need to get enough bandwidth to transmit a biometric image. Bankers say that although in theory 3G data services are widespread in India, the experience on the ground is that connectivity is patchy in many areas. Also unlike in the past, card swipe machines cannot be connected to landlines as they will now need to be portable. Banks were in any case working toward portable machines as from next month punching the credit card PIN number will be mandatory for authenticating card transactions. "It may be recalled that the " Working Group on Securing Card Present Transactions" (chairperson: Gowri Mukherjee) set up by RBI, had recommended the evaluation of UIDAI's Aadhaar as an effective alternative for additional factor of authentication for domestic transactions subject to fulfilment of certain tasks stated therein. In order to evaluate this recommendation, another working group was formed by RBI to assess the feasibility of Aadhaar (biometric validation) as additional factor of authentication for card present transactions," RBI said in a statement. The central bank has said that it has examined the recommendations of the group. "In respect of cards, not specifically mandated by RBI to adopt EMV (chip) norms, banks may take a decision whether they should adopt Aadhaar as additional factor of authentication or move to EMV chip and pin technology for securing the present payment infrastructure," RBI said. It added that all new swipe-and-pay infrastructure has to be enabled for both EMV chip and PIN and Aadhaar (biometric validation) acceptance.