Aadhaar Payment App

Prime Minister Narendra Modi is coming up with an `Aadhaar Payment App' that could silence digital payments critics as the new app would do away with plastic cards and the point of sale machines once believed to be essential for a less cash society.
The app, to be launched on December 25, would also eliminate the fee payments for service providers like card companies such as Mastercard, or Visa, which has been a stumbling block in merchants switching to digital payments making it affordable to even merchants in remote villages, said people familiar with the development. All that it needs is an Android phone with the merchant.
How does it work? Merchants need to download the Aadhaar cashless merchant app on their smartphones connected to a biometric reader, which is currently available for Rs.2,000. The customer will then feed his or her Aadhar number in the app, select the bank through which the transaction will take place, and the biometric scan will work as a password for the transaction to be authenticated.
“This app can be used by a person to make payments without any phone,'' said Unique Identification Authority of India (UIDAI) CEO Ajay Bhushan Pandey. Almost 40 crore Aadhaar numbers already stand linked to bank accounts ­ that is half the adults in India.
The government, along with the regulator and payments companies, are working to ensure that the objective of making digital payments a reality across the country. IDFC Bank along with UIDAI and the National Payments Corporation of India developed this app which would be launched at the national level. The new technology was showcased on December 19 to finance minister Arun Jaitley and the information and technology minister Ravi Shankar Prasad.
Even though card payments made its way into Indian merchant establishments two decades ago, the acceptability has been poor due to the nearly 2-3% charges that merchants used to levy and the 2% charges the card companies like Mastercard or Visa used to levy. Furthermore, the lack of connectivity made it impossible for millions of merchants in the hinterland to adapt the card payment methods.
Meanwhile, almost 109 crore of the 120 crore Indians who are registered on the Aadhar platform are expected to benefit from the new app.