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Aadhaar Pay for merchants to be introduced with four banks including SBI soon

10:09 PM

After being initially announced for a December launch, which was delayed to the last weeks of January, the Aadhaar Pay for merchants is finally going to be introduced in the next few days starting with four banks, according to senior government officials.

The banks are the State Bank of India (SBI), Syndicate Bank, IDFC bank and IndusInd bank. Bank of Baroda and Punjab National Bank are also in the process of launching Aadhaar pay at the earliest, according to a report in the Economic Times. The delays have been because of lack of exact specifications for what kind of registered devices are allowed to accept payments, but detailed specifications are now available.

Image: IDFC

Image: IDFC

The Aadhaar Pay for merchants is a system that allows buyers to make cashless transactions without a smartphone or a plastic card. The consumers simply have to authenticate the transaction through a fingerprint scanner at the point of sale. There are no additional authentication mechanisms, only pressing a finger against the reader is enough to execute the transaction. Users must have an Aadhaar card linked to a bank account to make payments through Aadhaar Pay. Merchants have to install a fingerprint scanner that costs about Rs 2,000, and link the reader to a smartphone application.

Andhra Pradesh Chief Minister N Chandrababu Naidu soft launched the Aadhaar Pay system in fair price shops in Andhra Pradesh. The system was checked in the real world environment as a pilot project. IDFC bank was the first bank to introduce Aadhaar Pay. The bank directly sends the application to the merchants through a link over an SMS, and the application as implemented by IDFC is not publicly available on the Play Store. It is unclear at this point of time if the other banks will deliver the smartphone application for merchants in a similar way.

Rajiv Lall, Founder MD & CEO, IDFC Bank, said, “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. IDFC Aadhaar Pay will accelerate the pace of growth for cashless payments, giving wings to the government’s efforts towards digitisation for inclusive growth.”

Aadhaar Pay is based on the Aadhaar Enabled Payment System (AEPS), and is meant to facilitate cashless transactions particularly in remote and rural areas. The government officials claim that the delay was to ensure that the system is as secure as possible. However, payment systems based on biometric authentication is not implemented on such a large scale even in mature markets. There are a number of security concerns when it comes to biometric authentication for making payments.

No biometric authentication system in the world is 100 percent accurate, according to a report in Forbes. Even a marginal number of failures will affect a large number of people considering the large population of India.

Giving out a fingerprint to the shopkeeper is similar to handing over your ATM pin. Electronic pins or passwords can be changed when compromised, but once biometric security is compromised, it remains compromised forever. Users cannot cut their fingers and grow a new one if malicious entities duplicate the fingerprint. However, according to experts who have worked on the UIDAI Aadhaar project, the database has multiple layers of security, and breaching that data is not easy.

The post Aadhaar Pay for merchants to be introduced with four banks including SBI soon appeared first on Tech2.



from http://tech.firstpost.com/news-analysis/aadhaar-pay-for-merchants-to-be-introduced-with-four-banks-including-sbi-soon-363699.html
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