Looking to make Aadhaar a more powerful financial tool, the government has instructed all banks across the country to launch Aadhaar Pay by the end of the month. It will facilitate financial transactions by using fingerprints.
Reports said the banks would also have to enable ‘Pay to Aadhaar’ facility on the BHIM app by March 31.SBI and Punjab National Bank have been asked to provide the facility by the end of this week. This feature on BHIM app will help in making payments by simply entering the 12-digit Aadhaar number.
Officials said this move would encourage the use of online payments among the poor and illiterate in rural areas and help the country move forward towards digitisation.The government has already prodded all banks to move to the Aadhaar Pay platform at the launch of IDFC Aadhaar Pay — the first Aadhaar-linked cashless merchant solution, offered by IDFC Bank Ltd.
“All other banks must follow IDFC in adopting this model. If they don’t follow this lead, technology will make them redundant,” said Amitabh Kant, CEO, NITI Aayog.Aadhaar Pay is a service for merchants which will enable them to receive payments from customers without any physical payment instrument.
The Aadhaar Pay app has to be downloaded by merchants on their phones and linked to an Aadhaar biometric reader. Once the merchant has this infrastructure in place, consumers can start transacting.To use this service, the customer has to first link his/her bank account to the Aadhaar number.
To make a payment, the consumer just has to select the bank’s name and enter the Aadhaar number. The fingerprint is the password to authenticate the transaction.Aadhaar Pay works on any android-based phone, even a low-cost one, with an attached finger biometric device.
A top government official said banks have been directed to take merchants on board for using BHIM, fitted with ‘Pay to Aadhaar’ feature and Aadhaar Pay.