In another move to realize PM Narendra Modi s dream for Digital India, and move India towards a cashless economy, the government has been working to make payments process easier for everyone. The government recently launched Unified Payments Interface (UPI), which allows users to send and receive money by simply using a Virtual Payment Address (VPA). It also launched USSD-based mobile banking service that works on smartphones and feature phones. Using this service, one can check their account balance, send and receive money using MMID and mobile number. Now, the government has launched the Aadhaar Payment app to further ease the payments process. Also Read - Aadhaar card update: How to add or update phone number in Aadhaar card onlineAlso Read - Lost your Aadhaar card? Here's how to download Aadhaar card online
It s been over a decade since card payments were introduced in India. Yes, it eliminates the need for carrying cash everywhere, but due to the tax levied by merchants and card companies, it has seen a very low acceptance. With Aadhaar-based payment solutions, the government will not levy any additional charges on merchants, which is a good move to promote cashless payments. Demonetization of old currency notes has seen a jump in digital transactions, but that s because of lack of other options. Connectivity issue is another problem that has kept merchants away from installing the machines. But this is where Aadhaar Payment app will ease things for good. ALSO READ: Demonetization: How to get started with UPI apps and go cashless to beat the cash crunch Also Read - How to apply for Aadhaar card for your newborn
What is Aadhaar Payment App
The Aadhaar Payment App uses Aadhaar Enabled Payment System (AEPS) for payments. This payment system will also help to do away with the point of sales machines (POS) and plastic money (credit / debit cards), PINs and passwords. The app has been developed by IDFC Bank along with National Payments Corporation of India (NCPI) and UIDAI.
A new wave of Digital Revolution has started in India.It’s time to know about Aadhaar Enabled Payment System for easy banking transactions. pic.twitter.com/MPHqr9TtpE
Ravi Shankar Prasad (@rsprasad) December 26, 2016
How to prepare for Aadhaar payment
To be able to make payments via AEPS, customers and merchants need to link their Aadhaar card with their bank accounts. In case of private banks such as ICICI and HDFC among others, you can either call up the customer care and provide them with your Aadhaar card number of updation, or can be done using internet banking too. Once your Aadhaar card is linked with all your bank accounts, you re good to go.
As per recent numbers released by the government, nearly 40 crore Aadhaar numbers have already been linked with bank accounts, and by March 2017, the government aims to link all Aadhaar numbers with bank accounts. ALSO READ: How to use USSD-based mobile banking, here s everything you should know
How Aadhaar Payment App is different from other payment solutions
Currently, if you want to make digital payments, you need a smartphone and some app like Paytm, Freecharge, or UPI enabled app among others. But, AEPS will completely eliminate the need of having a smartphone to make payments. AEPS is basically aimed at merchants, which will enable them to accept cashless transactions.
Government has ensured that Aadhaar card has a wider reach, not only in metro cities, but also in rural areas and villages. Now, when we talk about villages, not everyone uses a smartphone, and so apps like Paytm or UPI are out of question. But this is when Aadhaar payment system will enable them to make cashless payment, even without having a smartphone.
Aadhaar Payment solution – requirements and working
Merchants need an Android smartphone, the Aadhaar Pay app and a biometric reader, which can be purchased for Rs 2,000. After downloading the app on their smartphones, merchants need to enter their Aadhaar card number, select the bank and validate their fingerprint. When accepting payments from customer, merchants need to enter customer s Aadhaar card number and bank name, followed by amount.
The payment takes place after the biometric scan, which also works as a password. Once the authorization is successful, the payment will be transferred from customer s bank account to merchant s bank account, it is that simple.
Benefits of Aadhaar payments for customers
It s not just about making digital payments to merchants, but Aadhaar-enabled payments also open a whole lot of other benefits too. For instance, you can enter your Aadhaar number and scan your fingerprint on the PoS machine in banks for making cash deposits, withdrawals, checking mini statement, account balance and more.
You can also transfer funds to your family or friends account using AEPS. On the PoS machine, enter your Aadhaar number and scan your fingerprint, enter the recipient s aadhaar card number followed by amount and validate the transaction with your fingerprint. The money will be transferred from your account to the recipient s account. As the aadhaar payment bridge uses Immediate Payment Service (IMPS) service, the funds are transferred instantly, and it works 24 hours a day, seven days a week. ALSO READ: Now, you can make payments via Aadhaar Card and mobile number only
With all transactions taking place digitally, we can finally move towards a cashless economy, Also, digital transactions will greatly help the government to know about the money flow, and thus help curb the black money problem too. If the implementation is done the right way, we would end up making digital payments even for basic stuff such as buying vegetables, milk, and more.