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Inside India's plan to substitute cash with its citizen's fingerprints



India just took its next major step in becoming a cashless society.

IDFC Bank has launched an app called Aadhaar Pay that aims to help millions of its citizens without a smartphone to pay for their purchases digitally with just their fingerprint. 

Merchants will be able to download the app on their Android smartphones and attach a fingerprint scanner device. To make payments, buyers will only have to choose their bank name, input their unique Aadhaar number and scan their fingerprint, which acts as a password to make the payment directly from their bank account linked to their Aadhaar card. 



Over one billion people in India already have an Aadhaar card, making it the world’s largest biometrics based identification system. The Indian government intends to link all savings bank accounts in the country with an Aadhaar card. Currently, about 400 million of the 1.12 billion bank accounts are linked to Aadhaar cards reports suggest. 

This could be the solution India required to usher its vast majority of population — which is still not connected to the internet, is illiterate and doesn’t own smartphones — to cashless digital payments.

Of the country’s 1.3 billion population, only about 268 million people had a smartphone at the end of Q3 2016, according to marketing research firm Counterpoint. Of them, not every device is connected to the internet. In the wake of country’s major move to invalidate cash last month, the vast majority of the consumers have been stranded with no option but to queue outside banks and ATMs

Another advantage of Aadhaar Pay is neither the merchant, nor the customer, is charged any transaction fee, which makes it equivalent of paying by cash. The app is already available at over 100 merchant outlets in the states of Andhra Pradesh, Delhi and Bihar.

“It is [sic] 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 digitization  for inclusive growth,” Dr. Rajiv Lall, Founder MD & CEO, IDFC Bank said in a press statement. 

Today’s announcement mark a major expansion of Unified Payment Interface, which the government announced only earlier this year. UPI is government’s audacious project to make person-to-person and e-commerce transactions swifter and easier

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