In the last few decades, a huge shift has been observed in a way the Indian populace is carrying out transactions, with people becoming extra cognizant regarding the vitality of secure cashless payments & transactions.
As digital payment solutions have become more global, the security concerns pertaining to online or mobile transactions have also raised. Consequently, the cashless payment systems make provision for secure transactions through a set of innovative Biometric & Aadhaar based payment instruments.
Sometime back, GOI has instituted Aadhaar Enabled Payment System (abbreviated as AePS) that permits an interoperable online payment system via POS (Point of Sale) or Micro ATM asking the users to authenticate their identity by furnishing 12 digit Aadhaar number and their biometric details with fingerprint or iris scanners.
“The AePS system ensures that the government benefits and subsidy money reach directly in beneficiaries’ hands and eliminates any diversion by ghosts & middlemen,” said UIDAI chief executive Ajay Bhushan Pandey.
The Aadhaar based payment system influences the cash led Indian payment mechanism as the payers are now sanctioned to utilize their distinctive identity — Aadhaar card, for conducting safe & secure transactions, especially in the remote areas. It also permits the people to receive the money at their doorsteps through biometric fingerprint & iris authentication.
Is the Aadhaar based payment meant only for banks?
In today’s digital economy, the banks and financial institutions have already turned towards the biometric-technology based Micro ATM or POS under the ‘Cashless India’ program of the Government.
The NPIC and UIDAI have launched AePS as a bank leading Aadhaar-based payment model that makes it a compulsion for the customers/account holders to link their accounts with the Adhaar card in order to be able to make transactions using Aadhaar.
Mr. Hiren Bhandari (Technical Director of Mantra Softech India Pvt Ltd) said — ”The continual need for efficient, secure and instant payment wherein an individual’s fingerprint acts as a key is not restricted to the banking institutes now. To speed up the financial inclusion, Mantra’s biometric MicroATM and POS terminals have entered the payment world of retail outlets, SHGs, POs and various Aadhaar based government-led initiatives.”
How Aadhaar payment helps the non-banking players?
The Indian government has substantially introduced the Aadhaar Enabled Payment System for the non-smartphone savvy users, especially the ones residing in the tier-4 and tier-5 cities. The proliferation of smartphones has brought a big transition in the digital payment industry, leading to a seamless transaction experience.
For instance, a consumer or farmer in need of withdrawing cash is unable to find any bank or ATM in the vicinity can simply head towards a Kirana shop (i.e. Retail shop). Kirana store owners having Biometric POS Terminals or MicroATM can identify a farmer through his fingerprint impression before conducting the money withdrawal process.
When the farmer’s biometric details match to that UID-Aadhaar’s database, the withdrawal amount is transferred to the owner’s account from the farmer’s account. And the retail shop owner will provide cash to the farmer.
Aadhaar — The future of secure payments through wallets
Life is so much easier and simpler with biometric technology around us to help us carry out the operations more quickly and securely. And the advent of Aadhaar further proves to be a 99 percent efficient to identify Indian citizens and authenticate against his/her identity.
An amalgamation of biometrics and Aadhaar-based services together bolsters the growth of the Indian fintech ecosystem. However, digital wallets have created lucrative opportunities in the payment industry. The digital wallet owners, through their digital wallet Apps, ask the users to link their Aadhaar to identify his/her identity.
Today, the nation is taken by the storm by multiple digital wallets such as PayTM, BHIM, Mobikwik, Amazon Pay, Oxigen, ICICI pockets, PhonePe, Jio Money, Google Pay, HDFC Payzapp and others. In the coming future, credit and debit cards will soon be started feeling outdated as the proliferation of fingerprint scanning cards will find a way through for purchases to be authorized.
World Bank Group President Jim Yong Kim said, “Having access to financial services is a critical step towards reducing both poverty & inequality, and easy internet access on mobile phones shows unprecedented opportunities to utilize technology to achieve financial inclusion with greater security.”
The Way Forward
Biometrics and Aadhaar are taking the Payment industry to the next level. Mantra Softech India Pvt Ltd (largest and only biometric devices manufacturer in India) plays a significant role in contributing and assisting government in various initiatives by providing the next-generation Biometric devices like Biometric fingerprint POS device ‘mTerminal100’ — 9th CII Design Excellence Award-winning product, installed by nearly 19,661 fair price shops in the Western Uttar Pradesh, serving collectively 8.6 million eligible families in the region.
