Come April 14 and India will add a new feather in it’s cap. A technical and innovative feat which no other nation in this world can boast of. On the auspicious occasion of Baishaki and Baba Sahab’s birth anniversary a new payment ecosystem will come into life. Something which will help this young nation to leapfrog in terms of payment infra and will establish our institutions as world class and a hotbed for desi innovative solutions . From a decade or so, many individual Indians has established themselves as technical honchos but as a nation the light has not been not been as glittering as it should have been. There has been numerous reasons behind the same but as they say it’s better late than never. If you see current happenings there is a lot of positive ethos in the air about whole startup business. There are numerous desi success story doing the rounds which has been brought into life none other than our own young turks. BhimApp is a wonderful example of home grown innovation. All the features with regards to this app right from conceptualisation ,development to security audit has been done by very young startups and they have done it in a way any other established player would have done. The very fact that BHIM offer a payment ecosystem which is not available anywhere in the world is a clear cut indication of immense talent we have. It convert sending money as simple as seding a text message and covert every smart phone into money circulating machine with no cost at all.
A new jewel in this already shining crown will be added by #AadharPay. BhimApp works well for person to person (P2P) transfer and Aadhar pay will compliment it by enabling customer to Merchant transfer. This will not only make payment simpler for both customer and merchant but will also do away with the bottleneck of low availability of Point of Sale (POS) machines.
How it will Work?
-Merchants after registering with bank have to download #Aadharpay app of their bank and attach a fingerprint reading device with the phone.
-In order to make the payment, customer need to enter his aadhar number ,name of the bank and amount to be paid.
-Customer thumb impression will be used to authenticate the identity of the user.
-After authentication is successful ,payment will be made to merchant by deducting the amount from the Aadhar linked bank account of the customer.
How will it tackle the security concerns?
-Aadhar pay has been developed keeping security in mind. In fact , primary reason behind the delay in #Aadharpay launch is because Unique Identification Authority of India (UIDAI) which is governing body of the Aadhar was working on policy to ensure that all the biometric reading device follow a certain set of standards in order to enable end to end encryption of your thumb scan. It means only authorised manufacturers who will comply with the guidelines issued by UIDAI will be permitted to manufacture these device and while authenticating your biometric scans will be encrypted rights from the merchant end and will be validated against Aadhar database in that format only. This will place an additional layer of security to avoid misuse or your biometrics by storing them locally.
In addition to this, UIDAI also monitor the pattern of authentication and have ways to identify cases where partial impression or impressions with same angle are used for authentication again and again.
What will be the benefits of #AadharPay ?
-It will make e payment simpler as only Aadhar number and user thumb impression will be required.
-Will address the issue with regards to low availability of Point of Sale (POS) terminals.
-Will take care of cashless transactional charges which act as a roadblock in dissemination of e payments. Merchant has to pay a fee/merchant discount rate (MDR) to bank and card issuance companies (like Master/Visa) and as a result s/he hesitate in accepting e payments. #Aadharpay has provisioned a very nominal (0.25%) rate for MDR which will be paid by merchants to banks and no fees will be charged from consumers.
-Will provide an alternate and easy payment options in rural India, especially for the people who don’t posses smart phone or are not literate enough to operate and understand a digital payment ecosystem.
-This will also make debit cards redundant and will further simplify the banking.
This will be a watershed moment in the payment ecosystem not only for India but for the whole world. The concept as a whole is so revolutionary that it will change the face of payment industry in the near future and for the first time will make indispensable players like Master and Visa as dispensable. Besides reducing the overall payment time , it will also reduce the infra setup cost for banks and will helps them to improve their operating margins.
In order to make it successful in long term government and UIDAI has to remain sensitive to security aspect and need to fire with all guns as far as monitoring of same is concerned. Every small incident should be dealt with iron fist and proper policies should be formulated/updated based on the demand of the time. This is one of the important turning point in the history of India and we all need to do our bit to ensure that there is no going back from here.
PS: #AadharPay will not be available to public on google play store , after registration merchant will receive a text message with a download link. So please avoid downloading any app with similar name from play store as it may posses a serious security risk to your financial privacy.