Considering that black money laundering and terrorism is rising at an alarming rate in India, reducing India’s dependence on cash economy is a must. Following the events of demonetization in India, the Centre is putting in rigorous efforts to shift away from cash, hoping that it’ll prevent the tax evaders from concealing their income. Moreover, it’ll put a stop on terrorism, thus bringing in substantial benefits for the country. Taking a step in this direction, the Centre plans to introduce fingerprint enabled monetary transactions using Aadhaar Pay.
How Will This Effect Indian economy?
India, being the second largest population in the world boasts one of the highest cash-to-GDP-ratio in the world. Lubricating economic activities with paper has its costs. Though it’ll cause an annual burden of Rs. 21,000 crores annually yet, if implemented properly, it’ll help the government create a transparent financial system.
How will Aadhaar Pay App Work?
The UIA (Unique Identification Authority of India) has issued over 40 crore Aadhaar card to facilitate biometric authentication of Indian citizens. Concurrently, the developers are working on the Aadhaar Pay mobile application that can use by local merchants and shopkeepers for receiving AEPS or Aadhaar enabled payments. The idea is to replace pin, passwords and credit or debit card transactions.
The app will work like e-wallets. It’ll facilitate the transfer of money from the citizen to the merchants. The customers will have to provide their Aadhaar number and the bank account number associated with it. Their fingerprints will be taken to confirm their authentication. This system will ensure safe, cardless digital transactions, without the use of smartphones.
How will Aadhaar Pay PoS Machines Work?
Alternatively, the government will develop a finger biometric PoS machine to allow fingerprint authentication while making transactions. Every bank branch will try to enrol 30-40 merchants per branch to generate awareness regarding cashless transactions. The branches will issue fingerprint recording Aadhaar Pay PoS machines where customers can enter their Aadhaar card and punch in their fingerprints to make transactions.
As of now, only a few selected financial institutions like IDFC, Andhra, SBI, Syndicate and IndusInd have gone live with the app. The other banks are expected to adopt this system soon.
Benefits of Aadhaar Pay System
- Less vulnerability to online hacking,
- Transparent, cashless monetary transactions,
- Less possibility of evading taxes,
- Less money laundering,
- Each transaction occurring across the country will have proper records attested to it.
So, these are the potential benefits of Aadhaar App. Hopefully, they’ll help resolve the existing issue of black money in India. By implementing this technology, the government aims to rope in the lower classes and the illiterate or less technical folks who find it hard to use credit/debit cards and e-wallets.
