Pan Verification API For Instant KYC Verification

Introduction 

“KYC” or “Know Your Customer” is a set of standardized guidelines introduced by RBI in 2002 to protect financial institutions against fraud corruption, tax evasion, money laundering, and terrorist financing. KYC verification is a mandatory process that authenticates the customer’s identity and verifies it with retrieved pre-existing documents in the government database. KYC verification can be done in multiple ways. Pan verification API is one of the quickest and fastest ways of digital KYC verification. 

PAN Verification API is a convenient process of PAN verification through the real-time Application Programming Interface (API) in a short time without a registered KYC official or any third party. By verifying with API, financial institutions can automate the task of digital KYC without assigning any official. It is a cost-effective and time-efficient process that boosts productivity and efficiency.

PAN verification API makes the onboarding process easier and quicker for customers and vendors as well. Technology-driven PAN verification API provides ease, convenience, and reliability without interacting with anyone but interacting with the API only.

What is the PAN Verification API?

The PAN verification API is an online eKYC (electronic Know Your Customer) process designed to assist individuals in verifying their identity. PAN stands for “Permanent Account Number,” a distinctive alphanumeric code comprising 10 digits that is issued by the Income Tax Department. This API enables users to validate their identity through various online platforms.

PAN is the backbone of financial transactions and an important economic tool to track all monetary transactions. Through PAN verification personal and business transactions can easily take place and be monitored. Financial Institutions need PAN details to maintain users’ accounts, process transactions, and offer various financial services.

API stands for “Application Programming Interface”. API is a data bridge that transfers data between two applications or software products. It acts as an intermediary layer that transmits data between applications and software products or web servers. It determines how applications communicate with each other.

Verifying PAN through API is a convenient and simple verification process. Anyone can easily complete the KYC process by using PAN verification API within minutes. PAN verification API follows an easy-to-follow process that includes providing and uploading the PAN card details through the API platform and extracting data that gets verified by identifying matching data retrieved from Government databases.

Steps in the PAN Verification API Process

The PAN verification API extracts data from the front image of the PAN card and verifies the data with retrieved pre-validated data in the ITD database.

Steps in the PAN Verification API Process

The PAN Verification API process follows a few easy steps and identification can be validated in less than 10 mins.

  • Data Extraction API Request

The business sends an API request to start PAN verification

  • PAN Card Image uploaded

The client captures an image of the PAN card (front only)

  • Image details converted to encoded text 

The scanned data is converted into machine readable text

  • Data Extracted using OCR

OCR & AI technology recognize and extract required data

  • KYC verified with the ITD database

Verification algorithms authenticate these data against standard databases

  • PAN Card is verified through the API Platform

If the details match then PAN verification is completed

Top Three PAN Verification APIs for Digital Onboarding 

Any PAN cardholder can verify PAN details through PAN Verification API in three ways. Using this process the KYC verification can be done instantly expediting the onboarding process.

All these processes of PAN card verification API follow a normal procedure of requesting document data as an input and producing a response of extracted data against that request as the output and validating the data in the final process concluding the verification process.

The three processes of PAN verification API are as mentioned below.

PAN Verification API

This  API takes the PAN number as the input.

The API response includes the following validated data:

    • Name of the PAN cardholder
    • PAN Number assigned to that specified cardholder

PAN Extraction API

The API uses OCR to capture the front image of the PAN card as the input.

The API response includes the following extracted data:

    1. Name of the PAN cardholder
    2. PAN Number assigned to that specific cardholder
    3. Date of Birth
    4. Father’s Name

PAN Extraction & Verification API

The API fetches the details of the front image of the PAN card through the accessed camera of the user’s phone in a real-time API platform. The details captured through the image are converted into encoded data using OCR (Optical Character Recognition) technology.

In this API, data is first extracted from the PAN card image and then verified using data aggregate algorithms as the second step.

The API takes the following extracted data as the input:

    1. Name of the PAN cardholder
    2. PAN assigned to that specific cardholder
    3. Date of Birth
    4. Father’s Name

Once these data are successfully extracted, the API verifies the information with the data retrieved from the ITD database.

The API response produces the following validated data:

    1. Name of the PAN cardholder
    2. PAN associated with that particular cardholder

The Importance of PAN Verification API 

Document Verification is the future of KYC. Using PAN verification API, KYC can be processed instantly by acquiring demographic data such as the name, father’s name, age, gender, DOB, and unique PAN number that signifies an individual’s digital identification along with the financial status and transactional history determining the customer’s economic strength and the risk of onboarding a customer. 

PAN card verification be done on applications, websites, and by the entities authorized under NSDL e-Government Infrastructure Limited. NSDL PAN card verification can be done in three ways.

    • API Based
    • File Based
    • Screen Based

NSDL PAN verification API is an effective tool that can be leveraged to onboard instantly. It offers smooth, fast, and automated data verification via the API platform powered by smart AI technology.

Common Challenges in KYC Verification

There are many challenges that financial institutions face during KYC verification using PAN card numbers.

  • Human Error: While inputting details, there is a high risk of human error or wrong data entry due to typos, low-resolution documents, blurred documents, mismatching, and lack of data.
  • Data Risk: There is a high risk of data mismanagement. The documents pass through many stakeholders for approval; and verification. Data can be easily manipulated, misplaced, fabricated, or used for fraudulent purposes.
  • Lengthy TATs: The process of KYC verification through PAN is time-consuming in conventional ways as it takes more than 4-5 days. All the processes like applying, fetching details, checking, and cross-checking make the entire process slow.
  • Slow Onboarding: As the process is slow, the KYC verification task gets slower for the organizations causing inefficient onboarding cycles.
  • Low Efficiency and Productivity: Due to slow processes, the organizations have low efficiency and productivity and are not able to fetch as many customers as they should and thus fail to meet their business goals. These organizations face low turnaround times and cause more operating costs for managing the processes.

Should Your Business Onboard With PAN Verification APIs? 

The PAN verification process can be done both online and offline. PAN number verification API falls under the category of digital KYC. API-based PAN verification is a comparatively faster process as it deals with fewer details. API platforms enhance and streamline the verification and onboarding process bringing a better customer experience.

API integrations are extremely convenient for financial institutions for various reasons and can solve many existing problems during the verification processes.

Here are some of the reasons why businesses should be onboarding with the PAN verification API.

  • Instant Verification: PAN card details can be verified virtually on the API platform instantly without filling out any paperwork and any delay.
  • Speed and Security: The API platform ensures safety and security without depending on third parties.
  • Real-Time Verification: On the API platform there is zero chance of identity theft and fraudulent activities. The user has to provide the document in real time and verification can be done momentarily. 
  • Preventing Information Forgery: The sensitive information of each user is completely safe in the API platform as it does not require third-party assistance. 
  • Increased TAT: Financial Institutions are able to achieve 99% turnaround time by using integrated API solutions. 
  • Tracking Status: As the PAN validation API works in online mode, the status of all KYC and PAN verification can be properly tracked with ease.
  • Financial Inclusion: It empowers financial inclusions and can easily be availed by anyone. In remote locations where KYC officials or customers can not commute, with PAN verification API, account creation, KYC verification, maintaining transactions, and banking activities are easier. 

The BFSI sector ( Banks, NEO Banks, NBFC, Financial Institutions), the Retail and FMCG sector, Esports, and the Pharmaceutical sector can make good use of integrated API technology to onboard more customers with instant PAN verification.

How To Onboard Clients With the PAN Verification API

The steps involved in PAN-based KYC verification using APIs are as follows:

  • Step 1: The client logs into the onboarding portal using a link
  • Step 2: Customer details are entered and the PAN card image is uploaded
  • Step 3: The API retrieves validated data and matches this with data obtained from the client
  • Step 4: KYC is completed if the details are a match, otherwise the client must re-start the process

The PAN number verification API enables quick and secure KYC verification and allows businesses to scale up their onboarding process in a cost-effective manner.

SignDesk’s API Solutions For Hassle-Free KYC 

provides many technological solutions through various software. SignDesk offers API platforms that can be integrated with any financial institution’s website or applications through scan.It  for KYC verification making easier onboarding of customers and vendors in financial institutions.

SignDesk offers the following API services:

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