IDFC Bank has announced the nationwide launch of IDFC Aadhaar Pay, the country’s first Aadhaar-linked cashless merchant solution that uses a retailer’s own Android smartphone to enable cashless payments.
The solution is expected to enable millions of merchants facilitate cashless purchases for customers in a “cost- effective and scalable” way, supporting the government’s initiatives towards boosting cashless transactions.
Rajiv Lall, Founder MD & CEO, IDFC Bank, said: “IDFC Aadhaar Pay is a breakthrough in technology for cashless payments. It will enable citizens in the deepest corners of the country to participate in India’s digital movement, even those who do not own a phone but want to pay digitally. People only need to have a bank account and their Aadhaar linked to it.”
‘Simple way to pay’
“It is, thus far, the simplest way to pay, as it does not require a customer to swipe debit cards, remember passwords, or download apps. Importantly, there are no transaction fees for both merchants and customers,” he added.
IDFC Aadhaar Pay will be available on a merchant’s smartphone, who will be onboarded with IDFC Bank using e-KYC, within an hour. An SMS link thereafter will enable the merchant to download the IDFC Aadhaar Pay app on any basic smartphone, which will be connected to a STQC-certified Aadhaar biometric reader. A customer can pay the merchant with just two fields in the IDFC Aadhaar Pay app — bank name and Aadhaar number. The fingerprint is the password, thus making it easy to use, he said.
In rural and semi-urban areas, where customers need ‘assisted digital’ banking formats, IDFC Bank’s Aadhaar Merchant solution is a “perfect fit”, the bank said, adding that merchants too would benefit from it as there is no merchant discount rate (MDR) attached to it.
The solution went live last week at a fair price shop in Andhra Pradesh, inaugurated by Sate Chief Minister N Chandrababu Naidu. It was subsequently introduced to merchants in Delhi and Bihar. Over the past three days, over 100 merchant outlets have started using IDFC Aadhaar Pay.
As for the merchants themselves, IDFC Bank says they will see benefits with the new app. The IDFC Aadhaar Pay app is part of the new AEPS payment railroad, and hence has no merchant discount rate (MDR) attached to it – thus, they won’t be required to pay the bank a transaction fee. IDFC Bank says it targets reaching of 50,000 to 75,000 merchant points in the next two years.