In an effort to shift all transactions towards digital payments, the government is launching an ‘Aadhaar Payment App’ on 25 December.
The move is designed so that plastic cards can be done away with, and fee payments to Visa or MasterCard, who are service providers of these cards, can be eliminated. This will ensure that even merchants in remote villages can afford to make the transition to digital payments.


So, instead of pushing the UPI app, the government has decided that we need another app for digital transactions.


Essentially, all that will be needed now is to acquire an Android phone.




How It Works



The smartphone to be used will be connected to a biometric reader (available for Rs 2,000 currently). After downloading the Aadhaar app, the customer needs to enter the unique Aadhaar number and choose a bank for the transactions.


The transaction will be authenticated through biometric scan, which will serve as the password.




This app can be used by a person to make payments without any phone. 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.
Ajay Bhushan Pandey, CEO, Unique Identification Authority of India (UIDAI)



The app has been developed by IDFC Bank along with UIDAI and National Payments Corporation of India. Finance Minister Arun Jaitley and information and Technology Minister Ravi Shankar Prasad were shown the technology on 19 December.





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.
Rajiv Lall, MD & CEO at IDFC Bank




Point of sale terminals deployed by various banks is only 15 lakh and hence their acceptance has been slow. Out of these, SBI alone has deployed 3 lakh, followed by HDFC and ICICI banks.


Card payments were introduced in India nearly two decades ago, but due to 2-3% charge levied by merchants and 2% charge levied by card companies, the acceptance of this method has been quite low.
Moreover, a serious lack of connectivity has prevented merchants from accepting card payments.


The government is now working alongside payments and regulator companies so that the aim of country-wide digital transactions can be made possible.







Source:the quint

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