In an attempt to encourage poor and illiterate people in rural areas to make digital payments, the government is promoting Aadhaar Pay which ensures financial transactions by just using fingerprint.
Aadhaar Pay – the merchant version of the Aadhaar-enabled payment system (AEPS) which is already in use – will become an alternative for all online and card transactions which require password and PIN.
Through this app, merchants can take cashless payments from a customer who is only required to give his Aadhaar number, name of bank from where the money is to be deducted, and finger print for authentication.
A Times of India report cited Unique Identification Authority of India (UIDAI) CEO AB Pandey saying that the app works on any android-based phone, even a lost cost one, with an attached finger biometric device.
He further added that “this ensures digital transactions which are cardless, PINless. There is no need of smartphone for the customers”.
In order to popularise the use of Aadhaar Pay among merchants in rural areas, the government has asked banks to enrol 30-40 merchants per branch so that they are able to take cashless payments from customers.
Five banks – Andhra Bank, IDFC Bank, IndusInd Bank, State Bank of India and Syndicate Bank – have already gone live over Aadhar pay whereas several other banks are in the process of launching pilots on the app.
A senior official said that the plan is to identify the transactions made through the app separately in order to incentivise merchants for long-term sustainability and scalability of the system.
While the biometric device costs about Rs 2,000, the government is working on an incentive model so that the cost of the device is paid off 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,” AB Pandey was quoted by Times of India as saying.
