Aadhaar-based payments system likely by January-end: How it will work

After the big-bang launch of the government’s BHIM App (Bharat Interface for Money), Prime Minister Narendra Modi is likely to launch Aadhaar Pay by the end of this month or early next month.

The much-awaited Aadhaar-enabled payment system (AEPS) is a biometric way of making payments and would use only fingerprint linked to Aadhaar, which would be connected to a bank account, negating the requirement for a mobile phone.

The launch would be part of the government’s digital India campaign and “less cash” initiative.

Sources in the information technology ministry said at this stage, the government was in talks with various banks and the security checks of Aadhaar Pay are being conducted.

Officials said four major banks have come on board to implement the scheme. Talks are on with others and soon they would also join.

“We are at this point conducting mandatory security checks. All these checks would be done over next week. However, by the end of the month, it would all be ready. We would also have a host of banks onboard as well by then. Though nothing has been finalised till now, the Prime Minister would likely launch the payment system,” said a senior IT minister official.

AEPS along with the BHIM app and UPI are all part of the various modes of digital payment the government is exploring and has worked on for the last one year.

BHIM the rebranded version of UPI (Unified Payment Interface) and USSD (Unstructured Supplementary Service Data) was launched last year in December by the PM. The app has managed to gain major traction and has been downloaded more than 12 million times.

The government is working overnight to get the Aadhaar Pay online. Law and IT Minister Ravi Shankar Prasad said at an event recently almost 3 million Indians do not have mobile phones and this would help them make payments and keep everything transparent. "We are just going to finalise the whole process very soon of an Aadhaar-enabled payment where, at a flick of your thumb, you can make digital payments,” he said. 

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