Cashless, Pinless Transactions Via Aadhaar Card Will Soon Become A Norm; Rs 100 Cr Allocated To Encourage Merchants

Government of India will soon unleash a major drive to encourage, educate and promote Aadhaar based digital transactions, which are cashless and pinless.

Using bio-metric technology and IRIS scans, people would soon be able to send and receive payments, in a closed eco-system which would include your smartphone, Aadhaar card and bank account.

And the biggest advantage of using Aadhaar based transactions are that, they are cashless, and pinless, unlike debit/credit card transactions.

Ajay Pandey, director general of Unique Identification Authority of India (UIDAI) said, “Aadhaar-enabled transactions are card-less and pin-less. This would enable Android phones users to digitally transact using their Aadhaar number and fingerprint/iris authentication,”

Rs 100 Crore Incentives For Merchants, Traders

In a smart move, Govt. has decided to bring in awareness about Aadhaar based digital transactions, and for that, education is very important. 90% of small business owners are not even aware about the possibilities and the usefulness of a cashless economy.

In order to educate merchants and traders and teach them how they can do their business using Aadhaar Card-linked payment mechanism, Govt. has allocated a budget of Rs 100 crore. This would be used to provide incentives to merchants, traders and small businessmen across India, and encourage them to choose Aadhaar based cashless transactions.

IT secretary Aruna Sundarajan said, “IT department is providing incentive of Rs 100 for every merchant enrolled through over two lakh common service centres across India..”

Trinity Of Aadhaar-Mobile-Bank Will Work?

Besides, Govt. of India is actively trying to create a secured eco-system of Aadhaar cards, mobile phones and bank accounts; and once that happens, then chances are more than alternative digital transaction modes such as mobile wallets, credit/debit cards can take a back-seat.

We have already reported how Govt. of India has asked all smartphone manufacturers to link Aadhaar card with every smartphone, using a unique encrypted key for security. A chip needs to be embedded in the phones, which will directly connect with the Aadhaar server, and make the process of authentication easier, smoother and secured.

NITI Aayog CEO Amitabh Kant said, “We are asking mobile manufacturers to see if all mobiles made in India should be inbuilt with iris or thumb identification system to help Aadhaar-enabled transactions,”

Now, such a statement coming from NITI Aayog holds much significance, because they create 5-year plans for the whole country. And it seems Aadhaar Card based digital payments is one of the major issues of NITI Aayog now.

In a way, all digital transactions which you are doing right now using debit/credit cards and mobile wallets can soon be replaced by Aadhaar card based transactions. However, it is too early to predict whether Aadhaar based transactions will end the usage of mobile wallets in India or not.

But yes, one thing is pretty clear: This major drive by Govt. of India to promote and encourage Aadhaar based transactions will certainly open up new markets, bring in new users, and bring in a major change in the ‘approach to cashless economy’.