On the occasion of 126th anniversary of Dr. Bhim Rao Ambedkar, Honourable Prime Minister, Narendra Modi has launched BHIM-Aadhaar Interface to expedite the digitization wave, today in Nagpur.

This Aadhaar-linked Bharat Interface for Money (BHIM) mobile app, precisely called ‘Aadhaar Pay‘, is based on the Unified Payment Interface (UPI). Developed by National Payments Corporation of India (NPCI), it provides a brand-new of processing transactions to Indian citizens via just their fingerprint.

Any citizen without access to smartphones, the internet, debit or credit cards will now be able to transact digitally through the BHIM-Aadhaar platform, thus, realizing Ambedkar’s vision of social and financial empowerment for all. The service has been named as the as BHIM-Aadhaar Sewa.

How it works

The locus of the Aadhar Pay app is an Indian merchant. The app is only required to be downloaded by merchants or businesspersons (i.e. the one who will receive the payment), available for free download on both GooglePlay Store and iOS App store. Once the app has been installed, merchants can easily receive payments from a customer through their 12-digit Unique Aadhaar Number. The payment is processed from the customer’ Aadhaar enabled Bank A/C, i.e., AEBA.

In order to verify the payment, the customer would require scanning their fingerprint on Merchant’s fingerprint reading device. The fingerprint will be compared against the customer’s Aadhaar card data and the payment will be completed. Voila, that’s it.

Security Concerns

The Interface uses two main platforms to address the security concerns of the customers namely Aadhaar Payment Bridge (APB) and Aadhaar Enabled Payment System (AEPS). While APB acts as a repository between banks, AEPS ensures that all the details provided are authentic through an internal process as described by NITI Aayog.

Benefits to Customers

The app aids the illiterate, non-tech friendly and digitally backward population of the country. All of it, now required is memorizing a 12-digit Aadhaar Number and your fingerprint for making payments.

People who lack access to a smartphone or are unknown to e-wallets, especially in the rural areas have also come under the digital spectrum. Hence, helping the government accelerate its digitization campaign further. It allows all citizens to make payments using their Biometric data over a merchants’ Biometric-enabled system itself.

People who usually exhibit fear of transacting online through third-party apps due to several risks involved can now transfer money through Aadhaar Pay’s Government-made secure payment gateway. All transactions are authenticated only through the fingerprint of the customer which will be matched with their Aadhaar card. It does not even require an Internet connection or a PoS machine for its functioning.

Benefits to Merchants:

From a Merchant’s perspective, the app dismisses the need to pay MDR or Merchant Discount rate to receive transactions. All the banks charge MDR  for providing their debit or credit card services. However, a merchant validating payments through the BHIM-Aadhar app now no longer requires paying MDR to banks. Currently, 20 major banks have tied up with the app. The government has requested all public sector banks to go live with Aadhaar Pay and the National Payments Corporation of India for a smooth process.

A merchant doesn’t necessarily requires to purchase a biometric scanner but can scan customer fingerprint through his smartphone, installed with a biometric reader. To initiate the service for your customers, download the app from Google Play Store or iTunes App store. Login the app via your Aadhaar number using a fingerprint scanner. Once all the details are validated, you are ready to receive payments through the system.

In addition to the updates to the BHIM-Aadhaar platform, PM Narendra Modi has also debuted other referral and cashback programs that will enable you to earn extra monetary benefits. You will now be receiving a cashback of ₹10 directly to your Aadhar-linked bank account whereas the merchant you refer will receive ₹25. Starting today, this scheme will run for six months, until October 14.

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