The Indian customer is spoilt for choice when it comes to digital payment. The government and the IDFC bank have added one more to his kitty—Aadhar Pay. With Aadhar pay, one does not even need to carry a mobile phone as the payment can be done just with a thumb impression.
"So far, the focus has been on smartphone-enabled payments but Aadhar Pay fulfils the need of digitally excluded cutomers"', says Rajiv Lall, managing director of IDFC bank.
The possibility of using Aadhar for payments was also talked about by Prime Minister Narendra Modi in his December 30 address at the launch of BHIM app. Since then, it has taken more than a month for the first bank rollout of Aadhar.
Customers having an account in any bank can transact through Aadhar Pay; the merchant however will be serviced by the IDFC bank. For enabling Aadhar Pay, the merchant needs to have an android smartphone and a biometric device that can capture the thumbprint. After making the purchase, merchant enters the amount in the IDFC Aadhar Pay app and asks customer to enter his thumbprint on the biometric device. Once thumb impression goes, the payment is done.
Lall feels that this will catch up because the merchant does not need to pay any fee to the bank (MDR) as in the case of PoS machines. The biometric device will be provided by the IDFC bank.
In addition to being a shopkeeper, the merchant will also become a business correspondent with the IDFC bank. That is what its strategy is—the business correspondents will get customers to the bank and the bank, in turn, will save on customer acquisition cost and would rather gain from acquiring customers.
These merchants-cum-business correspondents will be able to process bill payments and do mobile/DTH recharges etc. Lall says that these BCs can earn anywhere between 2500-3000 a month extra on account of commission earned from these services.
IDFC is targeting one lakh merchants in next 36 months. It has already onboarded 1500 merchants across 16 states.
More than 50 crore bank accounts in the country are linked with aadhar. IDFC bank has become the first one to come on Aadhar Pay. Large banks such as the State Bank of India, the Bank of Baroda and the Punjab National Bank are expected to follow the suit soon.
