Prime Minister Narendra Modi on Friday launched the BHIM-Aadhaar interface – a biometric-based payment system – in Nagpur, Maharashtra. Launched on the occasion of Ambedkar Jayanti, it will allow users to make payments using just their fingerprint.
The Centre believes that Bhim-Aadhaar – also known as Aadhaar Pay – will make online payments easier for the illiterate and those without mobile phones or online wallets. It is also certain that the app will bring down people’s use of credit and debit cards and reduce cash transactions.
“Any citizen without access to smart phones, internet, debit or credit cards will be able to transact digitally through the Bhim-Aadhaar platform, thus realising Ambedkar’s vision of social and financial empowerment for all,” said the National Institution for Transforming India, or Niti Aayog.
How Bhim-Aadhaar works:
The platform is meant for use by merchants only. Customers with Aadhaar-linked bank accounts can make payments by authenticating the transaction with their fingerprint. Through the app, merchants get paid online from the customers’ bank accounts.
When accepting payments through Bhim-Aadhaar, merchants will not be charged a Merchant Discount Rate, which is an amount they pay to a bank for accepting digital transactions through credit or debit cards. So far, 27 major banks with around three lakh merchants are already on board with the new initiative so they can start accepting payments using the new platform.
Earlier, Niti Aayog had explained that Bhim-Aadhar would use two platforms – Aadhaar Payment Bridge and Aadhaar-Enabled Payment System. While APB will serve as a repository between banks and customers, AEPS will authenticate the online process. The department has emphasised that the app was fully secure to use.
On December 30, 2016, during the launch of the Bhim – Bharat Interface for Money – digital payments app, Modi had hinted that the Centre would introduce a service to allow the use of a thumb impression for payments. “The times have now changed. Today, your fingerprint is your bank, your identity,” he had said.
Modi on Friday launched two other incentive schemes that go with the Bhim app – a cashback scheme and one on a referral bonus – with a budget of Rs 495 crore for six months. Under the referral bonus scheme, both existing and new users who refer the Bhim app to others will get a cash bonus credited directly to their accounts. Under the cashback scheme, merchants will get a cashback on every transaction they carry out using the app.