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Indian government launches biometric-enabled digital payment platform for merchants

The Indian Prime Minister launched a payment platform for merchants, called BHIM Aadhaar using which citizens would be able to pay digitally using their biometric data like their thumb imprint on a merchant’s biometric enabled device. It could be a smartphone having a biometric reader. Hence, citizens would be able to transact digitally, without access to smartphones, Internet, debit or credit cards through the platform. Twenty seven major banks, along with 715,000 merchants are on board the platform.

The BHIM (Bharat Interface for Money) mobile application was launched on December 31, 2016,for facilitating digital transfer of funds using mobiles. The app has been downloaded 19 million times in the four months since its launch.

A later update to the app allowed users to transfer funds using their Aadhaar number, if their bank account had been linked to Aadhaar (Aadhar is India’s national ID system based on a 12 digit unique identity number linked to a citizen’s basic demographic and biometric information. As of March 31, 2017, an estimated 1.133 or 88.6% of the country’s population has been issued Aadhaar numbers.) This new platform for merchants eliminates even the need for having a phone.

Total Aadhaar Enabled Payments across platforms doubled from 25 million in November 2016 to over 50 million in March 2017. Total electronic payments appear to have increased month on month by 33% in volume and 59% in volume during the same period according to central bank data.

Incentive schemes

Two 100-day incentive schemes for promoting usage of digital payment methods were concluded and two new schemes were launched.

The Lucky GrahakYojana (Lucky Customer Scheme) and DigiDhan Vyapar Yojana (Digital Wealth Business Scheme), came to an end after an information, education and communication campaign led by NITI Aayog ((National Institution for Transforming India; a policy think-tank established by the current administration). Under the schemes INR 2.6 billion (~USD 40 million) of prize money was disbursed to 1.6 million winners, including customers and merchants belonging to different corners of the country and from varied walks of life. A 100 days of DigiDhanMelas (Digital Wealth fairs) were organised in 100 cities across India, with a turnour of 1.5 million people. According to the press release, at least 15,000 institutions have gone cashless across these 100 rural and urban cities across e the 27 states and 7 Union Territories (UTs) and hundreds of thousands of individuals were helped to open new bank accounts and obtain Aadhaar cards.

New Cash back and Referral bonus schemes were launched with an outlay of INR 4.95 billion for a period of six months. Both the existing user who refers BHIM and the new user who adopts BHIM would get a cash bonus credited directly to their account under the Referral scheme. As part of the Cashback scheme, merchants will get a cash back on every transaction using BHIM. Both schemes will be administered by the Ministry of Electronics and Information Technology (MEITY) and implemented by National Payment Corporation of India (NPCI; the umbrella organization for all retail payments system in India).

'Less-cash' townships

75 townships spread out across India are going to be declared ‘less-cash townships’. A less-cash township is defined as one where the deployment of payment acceptance infrastructure is complete and all the families in the township have been covered under training programs.

only those townships which have reported more than 80% of the total number of transactions in the township being done through digital modes of payments during the review period are included in this list. This was based on an independent third-party assessment by Price Waterhouse Coopers. These townships are expected to generate digital transactions in excess of 150,000 on a daily basis.

The government is targeting a total of 25 billion digital transactions during the current financial year.

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