PM Modi Launches Aadhaar-Based Payments Via BHIM App
Aadhaar payments will eliminate the need to have a debit card, smartphone or mobile wallets
Prime Minister Narendra Modi on Friday announced the launch of BHIM Aadhaar, the government’s latest offering to make digital payments. BHIM Aadhaar utilises the unique identification number and biometric information to authenticate the identity of a person and allows direct payment to merchants through bank accounts without using a card or a wallet.
As many as 27 major banks are already on board with three lakh merchants for BHIM Aadhaar, according to a release on the PMO website.
BHIM app will be the flag-bearer of Indian economy, the Prime Minister said at the launch of BHIM Aadhaar in Nagpur. “It costs billions of rupees to print, manage and transport currency. If this money can be saved, so much good can be done for the poor of the country.”
“If we move towards less-cash, there will be a positive change. Time is not far when we will have premises-less, paperless banking,” the PM said.
The BHIM app, launched by the Prime Minister in December 2016, has received more than 20 million downloads, with over 6 million users transacting through the app regularly, according to statistics released by the National Payments Corporation of India.
Digital payments have received a concerted push from the government since the demonetisation in November, but the value of such payments spikes and drops on a month-on-month basis. Aadhaar payments, however, is the government’s effort to reach out to those at the bottom of the pyramid who do not have access to cards, smartphones or internet. The solution enables payments by a touch of a finger.
Aadhaar payments will run on the existing Aadhaar-enabled Payment Systems platform, which has been in existence for over five years now. AePS is widely used by banks through their business correspondents to enable transactions at the doorstep of people in the rural parts of the country. Aadhaar payments is simply the broad-basing of AePS to help merchants collect payments on the same infrastructure.
Already, IDFC Bank has launched its app for the platform after a pilot which involved 100 merchants using the bank’s app on their smartphones in conjunction with a biometric scanner to collect payments. State Bank of India too has conducted a pilot for Aadhaar payments and is likely to roll out the solution soon after the formal launch on Friday.
BHIM Aadhaar will add to an existing gamut of digital payment options promoted by banks, including Unified Payments Interface, BHIM app, USSD-based payments and BharatQR, among others.
PM Modi also launched two incentive schemes with the Bhim app which provide cashbacks and a referral bonus with a budget of Rs 495 crore for the next six months. Existing and new users of the BHIM app will get a referral bonus directly in their bank accounts on referring the app to new people, while merchants will get a cashback on each transaction under the cashback scheme.