PM Modi's game-changer digital push: Know how Aadhaar Pay works
NEW DELHI: Prime Minister Narendra Modi today launched Aadhaar Pay at Nagpur on the birth anniversary of the Father of Indian Constitution Dr Bhim Rao Ambedkar. The app is expected to revolutionise digital payments, especially in rural India, as it is extremely easy to use for merchants as well as customers.
In the government's digital payments campaign, Aadhaar Pay comes after the launch of the BHIM App on December 30. While launching the BHIM app, PM Modi had said more work was being done which would increase the power of BHIM so much that people would be able to withdraw money even with fingerprints.
While the government launched BHIM as a payment application for peer-to-peer transactions post demonetisation, Aadhaar Pay is meant for merchants to receive digital payments from customers over the counter through Aadhaar authentication. The government has named the new payments system as BHIM-Aadhaar sewa.
Aadhaar Pay will be supported by 20 banks initially. The government has requested all public sector banks to go live with Aadhaar Pay and the National Payments Corporation of India, the implementing agency for Aadhaar Enabled Payments Systems, has extended help to the banks to ensure smooth onboarding.
A game-changer app
While, so far, digital payments have been dependent on credit/debit cards and mobile phones, Aadhaar Pay won't require a phone or a card. Even if a user cannot read or write, he would be able to use it. Low mobile-phone penetration and digital literacy are considered big obstacles in the government's plan to involve the masses in the digital payments system. Aadhaar Pay will face no such obstacles.
How Aadhaar Pay works
This app is only for merchants. A merchant has to download the app on a smartphone, connect the app to his bank account and link the phone to a biometric scan machine. To make payment, the customer just have to give his fingerprint. The customer must have an Aadhaar-linked bank account.
Free transactions
Since transaction charges discourage adoption of digital payments, especially in small towns and rural India, the Aadhaar Pay will levy no transaction fee on the merchant or the customer unlike the card-based digital payments.
A secure app
According to the Niti Aayog, the Aadhaar Pay is a safe app that uses two main platforms—Aadhaar Payment Bridge (APB) and Aadhaar Enabled Payment System (AEPS). APB will act as repository between the banks and the customers to provide a smooth flow of transactions, while AEPS will help in authenticating the online process.
Incentives scheme
Aadhaar Pay comes with incentives for merchants and customers-cash back and referral bonus. Under the referral bonus scheme, both the existing user who refers BHIM and the new user who adopts BHIM would get a cash bonus credited directly to their account. Under the cashback scheme, the merchants will get a cashback on every transaction using BHIM. The government has an outlay of Rs 495 crore for the scheme which will run till October 14.
In the government's digital payments campaign, Aadhaar Pay comes after the launch of the BHIM App on December 30. While launching the BHIM app, PM Modi had said more work was being done which would increase the power of BHIM so much that people would be able to withdraw money even with fingerprints.
While the government launched BHIM as a payment application for peer-to-peer transactions post demonetisation, Aadhaar Pay is meant for merchants to receive digital payments from customers over the counter through Aadhaar authentication. The government has named the new payments system as BHIM-Aadhaar sewa.
Aadhaar Pay will be supported by 20 banks initially. The government has requested all public sector banks to go live with Aadhaar Pay and the National Payments Corporation of India, the implementing agency for Aadhaar Enabled Payments Systems, has extended help to the banks to ensure smooth onboarding.
A game-changer app
While, so far, digital payments have been dependent on credit/debit cards and mobile phones, Aadhaar Pay won't require a phone or a card. Even if a user cannot read or write, he would be able to use it. Low mobile-phone penetration and digital literacy are considered big obstacles in the government's plan to involve the masses in the digital payments system. Aadhaar Pay will face no such obstacles.
How Aadhaar Pay works
This app is only for merchants. A merchant has to download the app on a smartphone, connect the app to his bank account and link the phone to a biometric scan machine. To make payment, the customer just have to give his fingerprint. The customer must have an Aadhaar-linked bank account.
Free transactions
Since transaction charges discourage adoption of digital payments, especially in small towns and rural India, the Aadhaar Pay will levy no transaction fee on the merchant or the customer unlike the card-based digital payments.
A secure app
According to the Niti Aayog, the Aadhaar Pay is a safe app that uses two main platforms—Aadhaar Payment Bridge (APB) and Aadhaar Enabled Payment System (AEPS). APB will act as repository between the banks and the customers to provide a smooth flow of transactions, while AEPS will help in authenticating the online process.
Incentives scheme
Aadhaar Pay comes with incentives for merchants and customers-cash back and referral bonus. Under the referral bonus scheme, both the existing user who refers BHIM and the new user who adopts BHIM would get a cash bonus credited directly to their account. Under the cashback scheme, the merchants will get a cashback on every transaction using BHIM. The government has an outlay of Rs 495 crore for the scheme which will run till October 14.
