The government is coming up with an ‘Aadhaar Payment App’ that could silence digital payments critics. The new app would do away with plastic cards and the point of sale machines once believed to be essential for a less cash society.
The app would eliminate the fee payments for service providers like card companies such as Mastercard or Visa, which has been a stumbling block in merchants switching to digital payments making it affordable to even merchants in remote villages. All that it needs is an Android phone with the merchant.
Merchants need to download the Aadhaarcashless merchant app on their smartphones connected to a biometric reader, which is currently available for Rs 2,000. The customer will then feed his or her Aadhar number into the app, select the bank through which the transaction will take place, and the biometric scan will work as a password for the transaction to be authenticated. “This app can be used by a person to make payments without any phone,” Unique Identification Authority of India (UIDAI) CEO Ajay Bhushan Pandey told ET. “Almost 40 crore Aadhaar numbers already stand linked to bank accounts – that is half the adults in India. The aim is to link all Aadhaar numbers with bank accounts by March, 2017.”
Furthermore, the lack of connectivity made it impossible for millions of merchants in the hinterland to adapt the card payment methods. There are over 15 lakh such machines for a population of 125 crore and nearly 5 crore merchants. If the 1.5 lakh bank branches in the country register even 20-25 merchants in their vicinity, it could boom.