Tuesday, 17 January 2017

Aadhaar app Vs other cards: How it will change the game for e-payments

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LATEST NEWS|The Unique Identification Authority of India (UIDAI) is working with banks and the Reserve Bank of India (RBI) to ensure that merchants who use its mobile-based Aadhaar application for digital transactions earn commission up to one per cent of the transaction value.

With UIDAI suggesting it is on path to get this in place in a couple of months, the Aadhaar Enabled Payment System (AEPS), could give debit cards and e-wallets a run for their money. In contrast to what UIDAI is advocating, all other forms of digital payments require merchants to pay a fee or commission for the use of technology.

“The Aadhaar-based system is being used for PDS (public distribution system) in Andhra Pradesh, Rajasthan and Gujarat. We are also in discussions with Haryana. We are enrolling banks so that they start accepting Aadhaar-based payments. Two banks have already agreed. The process of integrating merchants with banks will be completed in the next few weeks” said Ajay Bhushan Pandey, chief executive officer, UIDAI.

Once implemented, this model envisages doing away with all charges that are associated with a typical point-of-sale (PoS) machine. Under the system, UIDAI would enlist merchants as business correspondents. These merchants would use their phones linked to biometric devices for the transactions.

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