PM Narendra Modi launches BHIM-Aadhaar pay app for merchants

Prime Minister Narendra Modi on Friday launched the BHIM-Aadhaar digital payments platform for merchants, which makes paying with the help of thumb impression a reality. This is expected to herald a digital payments revolution in the country

Launching the platform on the occasion of the 1 26th birth anniversary of Babasaheb Ambedkar, father of Indian Constitution, at Deekshabhoomi in Nagpur, PM Modi said that soon people's mobile phone will become ATMs. ''The day is not far when premises-less banking will become and reality and mobile phones will play the most crucial role in it.''

Marking the culmination of the promotional drive `DigiDhan Mela', Modi also presented awards to the mega draw winners of Lucky Grahak Yojna and DigiDhan Vyapar Yojna and felicitated some of the winners of the Mega Draw.

Mega prizes of Rs1 crore, Rs50 lakh and Rs25 lakh were announced to small consumers for using Digital Payments Lucky Grahak Yojana.

Shraddha, daughter of small kirana store owner from Latur district in Maharashtra, received the Rs1 crore mega reward.

Addressing the gathering at Nagpur, Modi said, Bhim app will give more power to the poor. "Soon the poor of the country will chant Digidhan, Nijidhan," he added.

Stating that BHIM app will positively impact everyone's lives, Modi added, "Your mobile phone will be your bank."

''Download it (BHIM) on a smartphone or on a feature phone. It is not necessary to have the internet for this app. In the next two weeks, one more work is being done, which will increase the power of BHIM so much so that you would be able to withdraw money even with your fingerprints,'' PM Modi said at the event.

"This DigiDhan movement is a Safai Abhiyaan. It is to fight the menace of corruption. We are reaching a time when the mobiles phones will be where financial transactions will take place," Modi added.

BHIM-Aadhaar, the merchant interface of the BHIM App, will pave the way for digital payments by using the Aadhaar platform enabling each Indian to pay digitally using their biometric data on a merchant's biometric-enabled device like a SmartPhone with a biometric reader.

Any Indian without access to smartphones, internet, debit or credit cards will be able to transact digitally through this platform.

Already, 27 major banks are now on board this platform with 300,000 merchants to start accepting digital payments.

Modi also launched two new incentive schemes for the BHIM-Cashback and Referral Bonus with an outlay of Rs495 crore for a six-month period to ensure permeating digital payments culture to the grassroots.

Under the Referral Bonus Scheme, both the existing user who refers BHIM and the new user who adopts it would get a cash bonus credited directly to their accounts. Per referral, the government will deposit Rs10 to the account holder. The scheme will run till 14 October.

Under the cashback scheme, the merchants will get a cashback on every transaction using BHIM.

The benefits
Aadhaar Pay is the merchant version of the Aadhaar Enabled Payment System (AEPS). It will especially benefit those who do not have debit cards, mobile wallets and mobile phones.

Aadhaar Pay is an app that needs to be carried by the merchants only. Customers just need to have an Aadhaar-linked bank account and mobile phone, credit or debit cards. Merchants can download the Aadhaar Pay app to receive payments online from customer's bank account to their own account using the 12-digit unique ID (Aadhaar) number of the clients where clients can choose any of their bank accounts to do the transactions.

Each transaction will be authenticated by the fingerprint of the customer. Transactions can be made through Aadhaar-linked bank accounts (AEBA) only.

Merchants can download the app from play store or iTunes. After that, they can login with their Aadhaar number using the fingerprint scanner. Once the app is validated, merchants can use it to take payments.

According to the Niti Aayog, the Aadhar Pay is a highly secure app which will use two main platforms – Aadhaar Payment Bridge (APB) and Aadhaar Enabled Payment System (AEPS). APB will act as repository between the banks and the customers to provide a smooth flow of transactions, while AEPS will help in authenticating the online process.

Customers need not have a debit card or a credit card for payments through Aadhaar Pay. Also, Aadhar Pay would end the need to have an internet connection, many payment apps, or POS machines.

Aadhaar Pay also would not charge Merchant Discount Rate (MDR), which is the charge paid by the merchants to a bank merchant for accepting digital transactions through credit or debit cards.