Prime Minister Narendra Modi has launched BHIM-Aadhaar, the merchant interface of the Bharat Interface for Money (BHIM) mobile application. This enables Indian citizens to make digital payments using their biometric data such as their thumb imprint on a merchant’s biometric-enabled device.
Here’s all you need to know about this new BHIM-Aadhaar platform.
- How BHIM-Aadhaar Pay works
A merchant needs to download the BHIM-Aadhaar Pay app on his smartphone, connect the app to his bank account and link the phone to a biometric scan machine. To make payment, the customer just has to give his fingerprint. The customer must have an Aadhaar-linked bank account.
- Your fingerprint is your password
Users with Aadhaar-linked to their bank accounts can make payments by authenticating the transaction via their fingerprint. The app uses biometric scans as passwords. This means that users can use their fingerprint or biometric data to validate a transaction. The merchants get paid through the user’s bank accounts.
- No transaction fee (or MDR) for merchants
With BHIM Aadhaar platform, government has also done away with merchant discount rate (MDR) or transaction fee charged on debit card payments. MDR is the commission paid by the merchant to the acquiring bank for every transaction done on the Point of Sale (PoS) machine installed by the bank. A large portion of the MDR earned by the bank goes into paying interchange fees for the card issuing bank. The remaining part is paid to service providers such as Visa, MasterCard or National Payments Corp of India (NPCI).
- It does not need internet connection
“Any citizen without access to smartphones, internet, debit or credit cards will be able to transact digitally through the BHIM-Aadhaar platform, thus realizing Dr Ambedkar’s vision of social and financial empowerment for all,” the government said in a statement. This means any user with Aadhaar number linked to his bank account can make the payment with this platform.
- Makes cashless transactions possible for even those without smartphones
The app makes cashless transactions possible even for those who do not have mobile phones. However, the merchant accepting the payment has to have a mobile phone.
- It needs your Aadhaar number to be linked with bank account/accounts
Though users don’t need any password or app, it is mandatory for them to have their Aadhaar number linked to their bank account/accounts to make the payment.
- Based on APB and AEPS
According to Niti Aayog, Aadhaar Pay uses two platforms — Aadhaar Payment Bridge (APB) and Aadhaar-Enabled Payment System (AEPS). APB acts as repository between the banks and customers to provide a smooth flow of transactions, while AEPS helps in authenticating the online process.
- For every successful referral, users can earn Rs 10
Prime Minister Narendra Modi announced incentive program for BHIM-Aadhaar digital payment platform for both users and merchants. Users can earn Rs 10. Under the referral bonus scheme, both the existing user who refers BHIM and the new user who adopts BHIM would get a cash bonus credited directly to their account.
- Cash incentives for Merchants
Under the cashback scheme, the merchants will get a cashback on every transaction made using the BHIM app.
- 27 major banks on board
According to government 27 major banks are on board with 3 lakh merchants so that they can start accepting payments using BHIM-Aadhaar.