IDFC Bank launches ‘Aadhaar Pay’ digital payment platform
IDFC Bank has launched a digital payment platform ‘Aadhaar Pay’ that will allow even those without mobile phones to do cashless transactions
IDFC Bank on Tuesday launched a digital payment platform 'Aadhaar Pay' that will allow even those without mobile phones to do cashless transactions and is expecting the initiative to win 1 crore customers every year.
The newest bank in the private sector formally launched the unique identification number-based Aadhaar Pay service, having done a pilot in 16 states three months before.
"It actually makes cashless transactions possible even for those who do not have mobile phones, but the merchant has to have a mobile phone. All one needs is to get the bank account number linked with Aadhaar. With this, basic banking will come to those not having even mobile phones," IDFC Bank Founder MD & CEO Rajiv Lall said at the launch.
It is the first bank to launch this merchant solution in the country.
Lall hopes to acquire about 1 lakh merchant sites on this infrastructure in about two years.
"Imagine if IDFC Bank has a network of 1 lakh merchants across the country, each merchant over 1 year is able to acquire for me 100 savings account customers from that village each year. I would have created a network which is capable of acquiring at least 10 million savings account customers for me every year," he said.
The bank will levy no MDR (merchant discount rate) fee on merchants who come on board the Aadhaar Pay application.
These merchants, mostly located in remote areas, will simply need a smartphone to download the app and an Aadhaar dongle to read biometrics of a customers for a transaction.
IDFC Bank said it will also bear the price of Aadhaar dongles, costing ₹2,500 apiece for merchants, as recovery can happen by acquiring more savings account customers.
The bank has also started offering public distribution system (PDS) to beneficiaries through Aadhaar Pay.
NITI Aayog Chief Executive Amitabh Kant, who was also present at the launch, said India is at the cusp of a major digital revolution.
"This enables us to reach really at the very bottom of the pyramid where people do not have either GSM or basic phones, which is a significant percentage of our population," Kant said.
The Ministry of Electronics and IT Secretary Aruna Sundarajan said: "It is pioneering for the bank to do so. It will be the biggest paradigm change that we will see in banking and financial inclusion goal."
Talking about the security feature of the Aadhaar Pay platform, Unique Identification Authority of India (UIDAI) CEO Ajay Bhushan Pandey said the system is no less secure than any other payment gateway in the country.
"The merchant-customer transaction is supposed to happen in a small areas/villages where most of the people are known to each other. So even if any fraud happens, a full digital trail will be available to track it down," Pandey added.
IDFC Bank's Aadhaar Pay app is developed in association with the Ministry of Information Technology & Electronics, UIDAI and the National Payments Corporation of India.
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