Biometric Authentication Based Aadhaar Pay to Launch Soon with SBI & 4 Other Banks
In a bid to promote digital transactions, Prime Minister Narendra Modi had earlier announced that biometric-based payment system Aadhar Pay will be functional soon. The government is ready to go live with the said payment solution incorporating five banks that include the country’s largest public sector bank, State Bank of India.
“The Prime Minister during the launch function of BHIM said that Aadhaar Pay — whereby Aadhaar enabled payments will happen – will be launched shortly. Now five banks are ready to launch it,” the official said, as mentioned on ET.
The other banks which will follow the payment method soon are Syndicate Bank, IndusInd Bank, and IDFC Bank. Bank of Baroda and Punjab National Bank.
In order to enable the new payment system, the Unique Identification Authority of India (UIDAI), has also come up with detailed specifications on what kind of registered devices will be allowed.
“Some people had highlighted some security concerns with it. If we want Aadhaar to proliferate, we need detailed guidelines on the kind of the devices that can be deployed,” the official said to ET.
The government has set up a time limit till March 31 for all banks to launch the payment solution.
What is Aadhaar Pay?
It is a merchant version of Aadhaar-enabled payment system, which lets consumers pay without any physical payment instrument. The application will run on Android platform, as of now; the iOS application hasn’t been confirmed yet.
In order to use the application, merchants are required to download the Aadhaar Pay app and then register to start operating the app. After registration, the merchant’s mobile phone will be linked to an Aadhaar biometric reader.
After the infrastructure is in place, the consumers can start transacting. To make a payment, the user needs to enter her bank’s details (name) and Aadhaar number. The fingerprint is the password for the transaction. To use this service, the customer has to first link her bank account to her Aadhaar.
What’s the idea behind rolling out this service?
Making transactions has become more like a chore, particularly after the sudden shift to digital economy; also, the usage of PoS machines makes digital cash transfers slow when there is huge traffic.
Aadhar pay aims to rectify these issues, as the payment does not require any credit or debit card, plus there is no need of carrying smartphone around to make transactions. Aadhaar pay is an independent mode of payment solution, which basically aligns the bank accounts and Aadhaar ID together.
Can this payment solution accelerate digital cash transactions?
Around 112 crore people in the country have Aadhaar and around 40 crore bank accounts have been linked to the unique identity number so far. If the payment solution works without setbacks, then it will surely turn out as an efficient supplement to usual payment methods.
Also, as per statistics just 17% Indians own a smartphone, which is relatively low as compared to other nations. As online transactions require smartphones and debit cards, Aadhar pay might change this, by providing an option to go cashless without having the need to own any of the two.