Keen to push digital payments among the poor and illiterate in rural areas of the country, the government is pushing to popularize Aadhaar Pay which ensures financial transactions by just using fingerprint. Aadhaar Pay, which is merchant version of the already in use Aadhaar-enabled payment system (AEPS), will become an alternative for all online and card transactions which require password and PIN.
The app facilitates merchants to take cashless payments from a customer who is only required to give his Aadhaar number, name of the bank (from where the money is to be deducted) and finger print for authentication. Unique Identification Authority of India (UIDAI) CEO AB Pandey said Aadhaar Pay works on any android-based phone, even a low cost one, with an attached finger bio metric device.
This ensures digital transactions which are card less, PIN less… There is no need of smartphone for the customers, he added. In order to popularize the use of Aadhaar Pay among merchants, the government has asked banks to enroll 30-40 merchants per branch so that they are able to take cashless payments from customers. At present five banks Andhra Bank, IDFC Bank, IndusInd Bank, State Bank of India and Syndicate Bank have gone live over Aadhaar Pay and several banks are in the process of launching pilots on the app. A senior official said the plan is to identify Aadhaar Pay transactions separately and to incentive’s merchants for long-term sustainability and scalability of the system. As it needs a bio metric device costing about Rs 2,000, the government is also working on an incentive model so that cost of the device is a mortised over time and the merchants are encouraged to use it.
Fingerprints can’t be copied as it get encrypted. Even if any merchant or customer tries to misuse the fingerprints, he will be caught immediately as the location of merchants using the app is known to the bank. The AEPS platform, launched in December 2012, enabled people to carry out banking transactions over hand-held devices (micro ATM) using the Aadhaar number and fingerprints. The Andhra Pradesh government has launched cashless payments at most of the fair price shops (FPS) and Gujarat, in partnership with CSC e-governance, has launched cashless payments using AEPS platform at over 3,000 fair price shops.