PAN 2.0: What Are Fintech Companies So Excited About it?

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Today, on the #FintechFriday Financial Desk, we have

• What is PAN 2.0?
• Fintech companies are in cloud nine! Why though?
• PAN 2.0: Features in Detail
• Conclusion

What is PAN 2.0?

Did you just exclaim, “Oh no, one more card!” Then hold on, that’s not exactly the case. PAN 2.0 is an initiative by the Indian Income Tax Department to modernise the Permanent Account Number (PAN) system. This ?1,435 crore initiative hopes to transform PAN as the “single source of truth,” making it a standard business identifier across all digital systems of specified government agencies. As a result, a unified digital portal for all PAN-related services will be rolled out.

And what’s more? PAN 2.0 comes with QR code-enabled PAN cards, translating into better security and faster validation. Truly Gen-Z of PAN card, isn’t it??

Existing PAN cards will remain valid and be migrated to the new database once PAN 2.0 is active. At the same time, “individuals can upgrade to a new PAN card featuring added functionalities such as QR codes and updated designs.” Authorities stated, "The PAN number will remain the same, but users can opt for a refreshed version with modern features. The migration to the new system will happen automatically for all existing PAN holders.”

Fintech companies are in cloud nine! Why though?

Fintech companies cannot stop raving about PAN 2.0. According to reports, PAN 2.0 will “help fintech and other companies reduce costs while streamlining operations.” Unlike the current process, where Protean and UTIITSL are authorised to issue PAN cards, PAN 2.0 will introduce an upgraded system for issuing new PAN cards. At the same time, existing PAN data will be consolidated into a centralised database.

This, in turn, will streamline the integrations and ensure reliable verification of PAN credentials, bolstering the overall credit ecosystem. On the other hand, having a single authority responsible for issuing PAN cards will reduce the likelihood of duplication, thereby decreasing the number of litigations. Currently, several court cases involve individuals using multiple PAN numbers.

This will simplify and streamline the client onboarding process, making it more efficient and cost-effective for fintech companies in India.

PAN 2.0: Features in Detail

PAN 2.0 comes with several innovative features, such as?

• Faster services: Thanks to the QR code and better facilities, PAN 2.0 aims to deliver faster and better services that are eco-friendly and paperless.?
• Unified Portal: A single platform will be rolled out for PAN and TAN services. Ensuring convenient and easier access for users.?
• Enhanced security: The QR code and PAN data vault will strengthen security. Improved security measures will safeguard personal and demographic information.?
• Improved grievance redressal system: One of the highlights of PAN 2.0 is its much-improved grievance redressal system, with a dedicated call centre and help desk to handle user inquiries and issues.

In other words, PAN 2.0 is more like an upgrade to the IT system in which the PAN architecture was running. Many experts believe that “PAN will now be the new Business Aadhaar.” The success of PAN 2.0 will ultimately be determined by how effectively the transition is managed, ensuring minimal disruption to existing systems.

Conclusion

India has made significant technological advancements, with PAN 2.0 as another key innovation milestone. However, challenges remain that could disrupt the process. At this stage, success hinges on efficiency and meticulous attention to detail.

What are your thoughts on PAN 2.0? Tell us in the comments.?