Aadhaar Pay: After BHIM, Prime Minister to launch new payment platform on Ambedkar’s birth anniversary

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Aadhaar Pay allows Instant Payments via Aadhaar Enabled Payments System and saves the customer from service charge or any extra charge on the payments.


In a bid to boost India’s digital economy, Prime Minister Narendra Modi announced the launch of the government’s new digital payments initiative – Aadhaar Pay. Aimed at making banking transactions easy and accessible to people who lack literacy, Aadhaar Pay will allow an Aadhaar-linked account holder perform all the transactions, just by their thumb impression.

Aadhaar Pay, the biometric-based digital payment system will be formally launched by PM Modi on April 14, also the birth anniversary of Dalit icon Dr Babasaheb Ambedkar. Reportedly, the Finance Ministry in India has asked all public sector banks to get on to the Aadhaar Pay platform by April 14. Notably, IDFC Bank, a private sector bank become the first to board Aadhaar Pay platform earlier this month.

Prior to Aadhaar Pay, the government launched Bharat Interface for Money (BHIM) app last year. While launching the app PM Modi expressed his aims to rope in unlettered people, often mocked as ‘angootha chap’, into digital India movement. “But now, the thumb impression would make way for a person’s bank, identity and even business,” he said. State-run banks have been asked to encourage merchants to hop on to Aadhaar Pay platform. “In the next two weeks, we expect 5 lakh merchants on board,” a government official was quoted on Economic Times . ALSO READ: Snapdeal ‘categorically’ denies any sale talks with Flipkart, Paytm

Aadhaar Pay shares similar mechanism as on other popular digital payments or digital wallet apps such as Paytm, PhonePe or FreeCharge. However, Aadhaar Pay is a little less complex and doesn’t mandatorily require a phone number. A customer can make payments, even if they do not have a smartphone or the app on their device.

The Aadhaar Pay platform require only merchants or shopkeepers to keep a smartphone. The app on a merchant’s smartphone would use the customer’s fingerprints to authenticate the transaction. Upon authentication, the amount is directly paid from the Aadhaar Linked account. The app allows Instant Payments via Aadhaar Enabled Payments System and saves the customer from extra service charge on the payments.

The Government has also advised state-run banks to ensure that PoS terminals rental payments are structured for not more than Rs 100 per month. The price of biometric-based PoS machines in India start at Rs 2,000. With the Aadhaar Pay app, you will not be able to carry a P2P transactions since a fingerprint scanner is mandatory for biometric authentication.

According to recent government data, 98 percent of adults or over 108 crore people in India had been issued Aadhaar cards until February 2017.

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