Aadhaar enabled payment system is a system of cashless payment where a customer pays for goods and services by authorising the payment using bio-metrics usually the fingerprint.
Many of you might have gone through the process of e-KYC while buying a new Reliance Jio sim card. The salesman or any store staff asks you to put your finger on bio-metric device connected to their smartphone and they retrieve your personal information as registered with UIDAI when you applied for Aadhaar card.
This system is almost similar. The merchant will have a fingerprint scanner connected to smartphone installed with an app that supports powered by Aadhaar Interface. Here’s how the system would work:
- The customer purchases any goods/services.
- The merchants calculates the amount to be accepted and inputs the amount in the app.
- The bank name and the aadhaar number of the customer are entered into the app.
- Merchant asks the customer to authorise the payment by placing his/her finger on the bio-metric scanner connected to merchant’s smartphone.
- The amount is transferred from customers’ aadhaar-linked bank account to merchants’ aadhaar-linked bank account.
Aadhaar can be seen as another big push towards cashless society. Aadhaar is going to make digital payments less complicated and simple even for the people who can’t use cards or digital wallets due to lower education or illiteracy.