Banks told to switch to Aadhaar Pay by end-March
23 Feb 2017
The IT ministry and the Unique Identification Authority of India (UIDAI) have asked all banks to move to the Aadhaar Pay platform by end March, in a bid to give a big push to digital payments.
However, to address security concerns related to biometric data, it has been decided that only those merchants registered with UIDAI will be able to provide Aadhaar Pay services.
To use the Aadhaar Pay service, the customer has to first link his / her bank account to the Aadhaar number.
To make a payment, the consumer just has to enter the Aadhaar number. The fingerprint is the password for the transaction.
''UIDAI has come up with detailed specifications to address the security issues which have been raised around Aadhaar Pay. From 1 June, only the devices which have been registered with UIDAI will be able to carry out payments on Aadhaar Pay,'' said a senior official from the IT Ministry.
Aadhaar Pay is a service for merchants which will enable them to receive payments from customers without any physical payment instrument. The Aadhaar Pay app has to be downloaded by merchants on their phones and linked to an Aadhaar biometric reader. Once the merchant has this infrastructure in place, consumers can start transacting.
''Around 5-6 banks are already ready with the system and we expect the Aadhaar Pay services to start from the next week. All the banks have been instructed to come live on Aadhaar Pay by 31 March,'' the official added.
The banks expected to go live on Aadhaar Pay very soon are State Bank of India (SBI), IDFC Bank, IndusInd Bank, Punjab National Bank, Syndicate Bank and Bank of Baroda.
The government believes that this method of payment will specifically be beneficial for those who do not have debit cards, mobile wallets and mobile phones.
Only a bank account and Aadhaar number will enable them to make cashless payments.
