Prime Minister Narendra Modi will next week launch the government’s new digital payments initiative that aims to make banking accessible to people who could not read or write.


Prime Minister Narendra Modi announced the launch of the government’s new digital payments initiative – Aadhaar Pay. Aimed at making banking transactions easy and accessible to people who lack literacy, Aadhaar Pay will allow an Aadhaar -linked account holder perform all the transactions, just by their thumb impression.

Aadhaar Pay, the biometric-based digital payment system will be formally launched by PM Modi on April 14, also the birth anniversary of Dalit icon Dr Babasaheb Ambedkar. Reportedly, the Finance Ministry in India has asked all public sector banks to get onto the Aadhaar Pay platform by April 14. Notably, IDFC Bank, a private sector bank become the first to board Aadhaar Pay platform earlier this month.

Bhim App
Bhim App

The government had launched the BHIM (Bharat Interface for Money) app in December last year , which allows users to conduct financial transactions through their smartphone. While it may seem similar to digital wallets like PayTM and MobiKwik, the key difference here is that the BHIM app links directly to a user’s bank accounts and doesn’t require you to transfer money to a third party piggy bank.

Now, the Aadhaar Enabled Payment System (AEPS) set to launch is a vendor-side feature of the app that allows users to shop in retail stores using the same Unified Payments Interface (UPI) used in the BHIM app.

How Aadhaar Pay will work?

Aadhaar Pay shares similar mechanism as on other popular digital payments or digital wallet apps such as Paytm, PhonePe or FreeCharge . However, Aadhaar Pay is a little less complex and doesn’t mandatorily require a phone number. A customer can make payments, even if they do not have a smartphone or the app on their device.

The Aadhaar Pay platform require only merchants or shopkeepers to keep a smartphone. The app on a merchant’s smartphone would use the customer’s fingerprints to authenticate the transaction. Upon authentication, the amount is directly paid from the Aadhaar Linked account. The app allows Instant Payments via Aadhaar Enabled Payments System and saves the customer from extra service charge on the payments.


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