Tuesday, March 14, 2017

How Aadhaar Pay (biometric based payment system) works?

Recently IDFC bank has launched a new mobile application called Aadhaar Pay. It is the first Aadhaar linked cashless merchant solution. This solution will eliminate the fees charged by private companies such as "Visa" and "Master Card".  Similar Aadhaar Pay apps is going to change the way India emerging as a cashless economy.

How Aadhaar Pay apps work?

Merchant downloads and registers for Aadhaar Pay mobile app. The merchant will also procure an STQC certified biometric fingerprint scanner and will be connected with the mobile app.
For the customer, you just need to link your account with your Aadhaar number.
During the payment process, the customer enters his/her Aadhaar number in the mobile app, chooses his bank and places his / her finger on the biometric scanner for authentication. Once authentication is a success, the amount is debited from the customer's account to the merchant's account.

Advantages of Aadhaar Pay

  • No need for the customer to carry smartphone or plastic cards
  • No extra transaction fees need to be paid to Visa or Master Card.
  • POS machine costs Rs 5000 plus while Aadhaar Pay along with the biometric scanner costs start for just RS 2000
  • No annual charges for customers like in Debit / Credit cards
  • No need to remember PINS / MPINS passwords etc

Value Proposition for Merchants

Limitations of Aadhaar Pay

  • Aadhaar Pay works only where there is internet connectivity whereas POS works over phone lines.
  • Don't have cash-back or discounts features available with eWallets 


In summary, it's a great initiative worth to have by any merchant as it saves money for merchants in term of transaction fees, also from the customer point of view, the customer need not carry plastic cards or smartphones to do a payment to the merchant. 

We, Finahub, are experts in Aadhaar related products and services like eSigneKYC, Authentication etc. If you want to know how your enterprise can start using it, please give us a call  @ 0484 2388285 or email us at [email protected]