DPI Brief — May 18, 2026

UIDAI Strengthens Aadhaar Governance with 2025 Regulation Amendments

The Unique Identification Authority of India (UIDAI) has continued to refine the Aadhaar regulatory framework through multiple amendment regulations in 2025, enhancing data accuracy, security, and verification capabilities.

Key regulatory developments include:

• Aadhaar Authentication and Offline Verification Amendment Regulations, 2025: Formalized offline face verification as a recognized authentication mode, enabling identity verification in disconnected environments while maintaining security standards. This supports Aadhaar-based verification in hospitality, transportation, and edge-based scenarios¹.

• Aadhaar Sharing of Information First Amendment Regulations, 2025: Expanded data sharing authority by allowing UIDAI to share Aadhaar numbers of children under five (enrolled without biometrics on birth certificates) with the Registrar General of India or state Chief Registrars to prevent duplicate enrolment. Also clarified that no notice is required when deactivating deceased persons’ Aadhaar numbers².

• Aadhaar Enrolment and Update Second Amendment Regulations, 2025: Established a clear process for deactivating Aadhaar numbers of deceased individuals, requiring verification with Registrar General of India or other entities before deactivation³.

• Aadhaar Payment of Fees for Performance of Authentication Amendment Regulations, 2025: Introduced new fee structure for requesting entities that obtain update information from UIDAI about Aadhaar status changes (omission, deactivation, reactivation), encouraging entities to contribute to data accuracy⁴.

These amendments reflect UIDAI’s ongoing effort to balance accessibility with security, modernize verification mechanisms, and maintain data integrity in India’s foundational digital identity system.

UPI Revenue Model Debate: Industry Estimates USD 3.1 Billion in Potential MDR Revenue

India’s Unified Payments Interface continues to dominate global real-time payments, but questions about sustainable funding models persist. The National Payments Corporation of India (NPCI), which operates UPI as a not-for-profit entity, reported a surplus of INR 1,552 crore in FY2025 across a network processing USD 3 trillion in transactions⁵.

Critical policy question:

Industry analysts estimate that a 0.1% Merchant Discount Rate (MDR) on UPI’s FY2025 transaction value (USD 3.4 trillion) would generate approximately USD 3.1 billion in annual revenue⁶. This revenue currently does not exist in the UPI ecosystem, creating a structural gap between India’s payment miracle and sustainable infrastructure funding.

Global context:

UPI now processes nearly 500 million transactions daily and accounts for approximately 50% of all real-time digital payment volume globally — a share no other payment system has approached⁷. The system is live in over eight countries across Asia, Europe, and the Middle East, with 23+ Memorandums of Understanding signed for international cooperation on Digital Public Infrastructure⁸.

The debate centers on whether India should introduce modest MDR charges, explore alternative revenue models, or continue relying on thin surpluses and government support to maintain UPI’s open, interoperable architecture⁹.

Zoho Invests Rs 70 Crores in ONDC to Boost MSME Digital Commerce Access

Open Network for Digital Commerce (ONDC) received a significant strategic investment from Zoho Corporation, committing Rs 70 crores to support the development of sovereign technology and expand digital commerce access for small businesses in India¹⁰.

Investment rationale:

Zoho emphasized that MSMEs face structural constraints in digital commerce, including limited market access and platform barriers that rarely align with their unique needs. The investment aims to strengthen ONDC’s ecosystem and accelerate MSME adoption of digital commerce tools¹¹.

Synergy with existing offerings:

Zoho already facilitates MSME digitization through its finance suite, including Vikra (seller app on ONDC), Zoho ERP, Zoho Books, Zoho Inventory, and Zoho Commerce. The investment reinforces the company’s philosophy of building sovereign technology that champions accessibility, flexibility, and inclusion¹².

ONDC’s mission:

ONDC seeks to replicate UPI’s success in digital commerce by creating an open, interoperable network that enables businesses of all sizes to participate in digital commerce on fair terms¹³. Zoho’s investment aligns with this vision, providing capital to expand ONDC’s infrastructure and adoption.

GeM Marks 9 Years of Digital Public Procurement with Incorporation Day Observance

The Government e Marketplace (GeM) celebrated its Incorporation Day on May 17, 2026, marking nine years of transforming public procurement in India through digital platforms¹⁴.

Platform impact:

GeM enables online procurement of goods and services by central and state government departments and public sector undertakings, ensuring transparency, efficiency, and inclusive market access¹⁵. The platform has facilitated procurement worth over ₹28,000 crore, with significant allocations to SC/ST enterprises (>₹6,000 crore) and startups (>₹19,000 crore)¹⁶.

Digital public procurement:

GeM represents India’s L4 Commerce DPI layer, complementing UPI in L2 Payments and ONDC in expanding digital commerce access. The platform’s observance of Incorporation Day highlights the maturity and growing importance of digital public procurement infrastructure in India’s Digital Public Infrastructure ecosystem¹⁷.

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