BHIM-Aadhaar launched; Indians can now pay with just their fingerprint

On Digital India Day, otherwise known as Good Friday, Prime Minister Narendra Modi launched the BHIM-Aadhaar - also known as Aadhaar Pay - the platform for merchants that will facilitate digital payments in the presence of various senior ministers. The government is also bringing in cash back and referral bonus schemes for the BHIM app.

The launch took place at Nagpur, on Friday, 14 April. The announcements are being made on the 126th birth anniversary of Dr Bhim Rao Ambedkar. BHIM stands for Bharat Interface for Money. BHIM Aadhaar will let India pay with just their thumb.

"Any citizen without access to smartphones, the internet, debit or credit cards will be able to transact digitally through the Bhim-Aadhaar platform, thus realising Ambedkar’s vision of social and financial empowerment for all,” said NITI Aayog. It will also make payments easier for the illiterate. The aim is to bring down the use of debit or credit cards and cash transactions.

"We are reaching a time when the mobiles phones will be where financial transactions will take place". Modi speaking at the event in Nagpur said. "This DigiDhan movement is a Safai Abhiyaan. It is to fight the menace of corruption".

So far, 27 major banks are on board and 300,000 merchants are ready to start accepting digital payments.

The biometric-based payment system, Aadhaar Pay, will make payment with just one's thumb reality. During the launch of the BHIM app on 30 December, Modi lso talked about Aadhaar Pay. He said that they were working on measures so that people can withdraw their money just with fingerprints. Today, Aadhaar Pay is a reality and reduces people's dependencies on debit or credit cards and will be a boost to digital transactions. This is similar to Samsung Pay, that was launched last month (LINK), but on a much larger scale.

NITI Aayog, the government Think Thank, said that digital transactions have increased 23 times since demonetisation was introduced in November.

While 1.9 crore downloads of the BHIM app, since its launch in December of 2016, might be a world record, it's important to note that this doesn't mean it translates into usage. In fact, according to data from March from the National Payments Corporation of India (NPCI), only .51 crore, or a mere 26.6%, have an active linkage with a bank account.

Modi, during his monthly Mann Ki Baat show, also said that each citizen should teach 125 people how to use the BHIM digital payment app. ""Remembering Babasaheb Ambedkar, you teach at least 125 persons about downloading the BHIM app".

All you need to know about BHIM-Aadhar merchant interface:

One other advantage of cashless payments is the reduction of interest rates on loans. The government is working to bring out a policy linking interest rates that are being offered to a borrower with the use of cashless mode of transactions. Boil it down and it means the more the use of cashless payments, the less the interest rate can be charged.

A track record of the person's usage of cashless modes will be checked on the basis of which the cost of borrowing can be fixed," Union information technology secretary Aruna Sundarajan said.