In a bid to encourage a less-cash economy in the country, the Indian government is slated to release Aadhar Pay, a mobile app for merchants on December 25.
The new Aadhar Pay app is developed by IDFC Bank in collaboration with the Unique Identification Authority of India (UIDAI) and the National Payments Corporation of India (NPCI) and is expected to be made available initially on Android-based Google Play platform on Sunday and later in Apple's iOS app store. It is expected to benefit around 40 crore people who have linked their Aadhaar number to their respective bank accounts.
How does Aadhaar Pay work?
Since most users of India are new to the concept of a digital economy, Aadhaar Pay developers have made an interface as simple as it can get. The consumer does not need even a phone to transact with the seller.
"The settlement is done through the Aadhaar bridge, which means it connects a much wider set of people. Anybody who has Aadhaar seeding done can make payments to merchants with this app. It wouldn't matter if the person does not have a credit or debit card, or even a mobile phone," said Rajiv Lall, MD & CEO at IDFC Bank, as reported by the Economic Times.
The vendors just need to install the Aadhaar Pay app from Google Play store on their Android phone and buy a fingerprint scanner worth Rs. 2000.
For a transaction, customers have to place their finger on the scanner and then they will be asked to choose which of the bank account they want to credit/debit and the amount will be paid/deducted from that particular account. During the whole transaction, people need not have to reveal a password nor a user-ID or wait for OTP (One Time Password), as the Aadhaar number holds all the required details to authenticate the transaction.
Another benefit of the Aadhaar Pay app is that the cost of the product will also get reduced, as it will eliminate the fee payments for service providers like card companies such as MasterCard or Visa, which many believe it to be the stumbling block for embracing digital transaction method by vendors in India.