IDFC claims the service has been launched after successful pilots across 16 states in a span of three months.
In order to use this system, the merchant needs a smartphone with the IDFC Aadhaar Pay app, and a device to read biometric data, which costs Rs 2500 as of now. All one needs is an Aadhaar linked bank account and a thumb impression which shall act as a password.
"It's a new paradigm, a quantum leap for banks". Aimed mostly at rural regions, the Aadhaar Pay for merchants allows customers to make purchases at shops through electronic transactions without having to use plastic cards or mobile phones.
By far, this is hailed as the simplest, seamless and cheapest form of cashless transaction, as the buyer need not have any fancy wallet app or an expensive mobile phone. With Aadhaar Payment App, customers need not to worry about the extra charges that are levied on the card-based transactions.
"All other banks must follow IDFC in adopting this model".
The service is going live just as Samsung launches its mPayment service in the country, suggesting that the latter and similar platforms like Apple Pay could face a particularly challenging market in India.
In December previous year, we had reported the introduction of Aadhaar Pay, which has been designed for cashless, pinless transactions. Currently, 14 banks have signed up for the new payment system.
To make payments, customers need to select their bank's name and fill one field on the merchant's phone - their Aadhaar number.
The app has been designed by IDFC Bank in association with the Unique Identification Authority of India (UIDAI) and National Payments Corporation of India (NPCI). Finance Minister Arun Jaitley had announced in the Union Budget that 20 lakh Aadhaar Pay Point of Sale (PoS) machines will be deployed by banks in the current financial year.