IDFC Aadhaar Pay App Launched, a Biometric Solution for Merchant Payments

At a launch event in New Delhi, IDFC Bank launched the IDFC Aadhaar Pay app – what’s being called India's first Aadhaar-linked cashless merchant solution. The Android app, which enables customers to pay merchants, was in its pilot phase before this, and was trialled by over 1,500 merchants across 16 states.

The IDFC Aadhaar Pay app was developed by IDFC Bank "under the guidance" of the Ministry of IT, NITI Aayog, Unique Identification Authority of India (UIDAI), and National Payments Corporation of India (NPCI). It is available only to merchants, who are on-boarded via e-KYC.

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The bank in an emailed statement detailed the on-boarding process, saying an SMS link enables the merchant to download the IDFC Aadhaar Pay app on any basic smartphone. This phone will then need to be connected to an STQC certified Aadhaar biometric reader.

To make payments, customers need to select their bank's name and fill one field on the merchant's phone – their Aadhaar number. The customer’s fingerprint is then used to authenticate the transaction. Customers themselves do not need a smartphone to complete the transaction, making the app most useful in rural regions.

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IDFC Bank explains that with the IDFC Aadhaar Pay app, "customers need not use debit or credit cards, download mobile applications, or even carry a mobile to make cashless transactions." It adds that the app eliminates the need of "remembering passwords, account numbers, or setting up of virtual payment addresses and using USSD codes to transfer money."

Speaking on the launch, Dr. Rajiv Lall, Founder MD & CEO, IDFC Bank, said, "IDFC Aadhaar Pay proves that technology can revolutionise last mile payments. By using the fingerprint as digital identity, it empowers even individuals without a phone to pay electronically for small value transactions. The convenience of Aadhaar Pay is expected to encourage a behavioural shift towards digital payments."

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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.