What is Aadhaar Payments? This is how you can use it

Ever since the launch of UPI, speculations have been rife that we will see more such experiments in the coming times. One of these is Aadhaar Payments (AEPS). An official announcement has been made about it and it will be rolled out soon. With its help, users will be able to send and receive money based on Aadhaar number and biometric information.

Last weekend, IDFC Bank announced a cashless system based on Aadhaar number. Retailer’s phone is used for digital payments. It has been named Aadhaar Pay. It has been launched in partnership with NPCI, UIDAI and IDFC Bank. The new system has been rolled out for 100 shopkeepers in the last three days. Aadhaar and UPI are used for payment in it.

Meanwhile, SBI has announced that it has adopted Shidki village in Maharashtra’s Pen taluka for testing Aadhaar payments. The shopkeepers of this village have been provided with Android smartphones and fingerprint scanners to promote cashless system there.

What is Aadhaar Payments?
As we have already told you that UPI is a big invention in the field of banking. It uses your mobile to identify you and turns the mobile into a debit card through which you can make payments from anywhere.

In a nutshell, with UPI, you can instantly transfer money using the IMPS payment framework without knowing the account number or IFSC code. All you need to know is their virtual identity like gopal@icici (for example), or 1234567890@axis (use your phone number instead of 1234567890).

Aadhaar is considered to be the supporting infrastructure of UPI. With the help of which Aadhaar payments are made. With its help, after verification of the biometric information given in Aadhaar, payment will be possible from those accounts which are linked to Aadhaar. This means that in the coming days, you will encounter a fingerprint reader instead of a POS terminal.

This is how payment will be made
Right now the system of Aadhaar payments is in its initial stages. SBI has adopted a village in Maharashtra for Aadhaar payments and IDFC has provided this facility to 100 shopkeepers. This number is so small that the chances of you encountering this system are very less.

As this system becomes more popular, you will need to do this… First of all, you must have an Aadhaar card. After this, Aadhaar must be linked to the bank account. If you have not linked it already, then go to the bank and share the Aadhaar details. However, many people are considering this a violation of privacy. But if you look at the pros and cons of this system, then you will want to be a part of it. After this, you will not need anything else.

The shopkeeper should have an Aadhaar payment system. For this, a bank account, an Android smartphone and a fingerprint scanner will be required. The merchant will have to install the Aadhaar payment app on his phone. It is not available on Google Play right now, but it will be made available in the future. Currently, this system is being paid for by the banks. As it becomes popular, merchants will have to pay for it like POS machines.

To pay in the store, you just have to provide your Aadhaar number. After this, your fingerprint will be scanned. Now you choose the bank linked to Aadhaar and then the payment will be done. You do not need to install any app. No wallet is required nor should you have a special card with you.

What will happen next…
Expect Aadhaar payments to become more popular, especially in small towns and villages, where the chances of smartphones and wallets or UPI systems being in use are very low.