Aadhaar payment system: Forget debit and credit cards, now pay your bills with your thumb

Mangalore Today News Network

New Delhi, Mar 07, 2017: An Aadhaar card-linked payments system was launched on Tuesday that will allow customers to ditch their debit and credit cards and pay using fingerprints or eye scan.

Aadhaar Pay, a new Android-based smartphone app, will also eliminate the fee charged by private card companies such as “MasterCard” and “Visa”.

Merchants must download the app on Android smartphones connected to a biometric reader. A customer must enter her Aadhaar number in the app and select a bank for payment. Biometric scans are used as passwords.

This is the government’s latest move to encourage people to go cashless. The app was first announced by finance minister Arun Jaitley in his budget speech in February. The government targets 25 billion digital transactions on various new payments platforms in 2017-18.

The government issued one billion Aadhaar cards till April 2016, the latest year for which data is available. At least 400 million of these are linked to bank accounts, and the government hopes to link the rest by the end of this month.

But Aadhaar Pay, which will be available on the Google Play Store, has some limitations.

It works only where there is internet connection, unlike debit or credit card machines which can work on telephone lines. Plus, the app can’t be used to transfer funds or get immediate information on refunds.

IDFC bank is targeting 75,000 merchants in the next two years.