The demonetization drive might have caused troubles to the entire Indian populace, but it has definitely ushered the era of digitization and online payments platforms. Not only private players have gotten a boost, the government has also been involved in launching its own initiatives and technologies. With regards to the same, Prime Minister Narendra Modi will launch the government’s new digital payments initiative next week — Aadhaar Pay.
Prime Minister Narendra Modi will launch the scheme on April 14 to mark the birth anniversary of Dalit icon Bhim Rao Ambedkar.
Aadhaar Pay, the new digital payments platform from the government, aims to make banking accessible to people who could not read or write. It is a biometric-based payment system that will allow an Aadhaar-linked account holder carry out all his banking transactions just by the use of his thumb impression.
A senior government official said that “this is in line with the government’s initiative to popularise digital payments”. He also said that the finance ministry has already asked all public sector banks to board the Aadhaar Pay platform by April 14.
Further, the ministry has also asked state-run banks to encourage merchants to board the Aadhaar Pay platform. “In the next two weeks, we expect 5 lakh merchants on board,” said the official.
The government has advised state-run banks to ensure that rental payments are structured in such a manner that small merchants do not have to pay rental of more than Rs 100 per month on the installation of PoS terminals. As per the latest government data, 98% of adults or more than 108 crore people in India had been issued Aadhaar cards until February.
A major benefit of Aadhaar Pay is that you can use the service without requiring a smartphone. It is possible because the service does not require the app. The merchant or a person, who want money, have to arrange hardware, and the payer don’t require anything.
India is currently at a stage where it is building path for electronic payments, and Aadhaar Pay will be another channel to make payments. However, it is said that compared to card payments, Aadhaar Pay will be cheaper.
Although four or five banks have already launched Aadhaar Pay in a small way—such as IDFC Bank Ltd, State Bank of India and Andhra Bank, the service is available in the form of closed user groups. And the government wants all public-sector banks to be ready with Aadhaar Pay in April, in time for the scheduled launch.
