On 24 December, Economic Times announced the imminent launch of an Aadhaar Payment App for merchants. No such app showed up on the Play Store and people were wondering whether or not it has launched. Even the name of the application was not clear, it has been referred to as “Aadhaar Payment App” and “Aadhaar Cashless Merchant App”. Over the course of the next few days, there has been a lot of interest by users to download and install the application, only to be disappointed.
Well, here is what happened. It is a back-end application, a service that can be implemented by any bank, but was first done by IDFC bank. The application had been launched on 24 December itself in Andhra Pradesh. The application launch at a fair price shop was inaugurated by AP Chief Minister Chandrababu Naidu. Over the course of the weekend, 100 merchants in Delhi and Bihar started using the app. The name of the application by IDFC is called “IDFC Aadhaar Pay.” The application is not the same as IDFC Bank Merchant Services.
The application is not available for regular consumers and is meant only for merchants. It has not been released on the Play Store. A merchant gets onboard IDFC bank through an e-KYC process and gets a link on a smartphone within the hour. The application can only be downloaded through that link, as of now. The application is connected to an Aadhaar biometric reader certified by the Standardization Testing and Quality Certification (STQC). Shoppers have to input their bank name and Aadhaar card number into the application and authenticate the transaction using the fingerprint scanner.
The application is meant to allow the citizens from remote and rural areas to make cashless transactions. Consumers only need an Aadhaar card linked to a bank account. There is no need for debit cards, credit cards, or even a smartphone. Dr. Rajiv Lall, Founder MD & CEO, IDFC Bank, said “It is, thus far, the simplest way to pay as it does not require a customer to swipe debit cards, remember passwords, or download apps. Importantly, there are no transaction fees for both merchants and customers. IDFC Aadhaar Pay will accelerate the pace of growth for cashless payments, giving wings to the government’s efforts towards digitization for inclusive growth.”
The merchant has to pay Rs 2,000 for the biometric scanner that works with the application. The amount of transactions per month are not limited. An article in Forbes points to a major flaw in the app though. No biometric scanning system in the world is entirely accurate, and the fraction of inaccuracies can be a major problem in a country with such a large population. Another problem is that a number of people in remote and rural areas without a bank account cannot use the application to make payments.
There are fake applications on the Play Store trying to capitalise on the surge of interest and it is better to not install them at all. Check the name of the publisher and go through other applications released by them. Official applications are by the mGovernance Team, or in the future, will be from the banks that implement the solution for merchants. An app called Aadhaar Aadhaar Pay INDIA GOVT currently shows up on top of searches for “Aadhaar payment app” or “Aadhaar Pay.” The application has nothing to do with the description and the name of the app has been changing. We have reached out to the developers for comments.