aadhar app: the e-payments disruptor
Is working with banks and the Reserve Bank of India (RBI)
Businesses that make sure they use their mobile devices
Digital transaction applications based on aadhar receive commissions up to transaction value 1.
With UIDAI suggesting it will do the job in a few months, aadhar enabled the payment system (AEPS)
Can give debit card and electronic
The wallet ran for their money.
Compared to what UIDAI advocates, all other forms of digital payments require merchants to pay fees or commissions for the use of technology. \"The Aadhaar-
PDS is using a system-based system (
Public Distribution System)
Andhra Pradesh, Rajasthan and Gujarat.
We are also having discussions with Haryana.
We are registering a bank so that they can start accepting aadhar-based payments.
The two banks have agreed.
\"The integration process between merchants and banks will be completed in the next few weeks,\" said Ajay Bhushan y, chief executive of UIDAI.
Once implemented, this model envisions the cancellation of all costs associated with typical pointsof-sale (PoS)machine.
According to the system, UIDAI will recruit merchants as business correspondents.
These merchants will trade using mobile phones related to biometric devices.
These require customers to enter their aadhar number and verify their fingerprints on a biometric reader connected to the phone.
In order to make it widely acceptable, the government is pushing to link all savings bank accounts with the aadhar number and complete them by a strict deadline.
UIDAI said that whenever a customer deals with a merchant through AEPS, the merchant will receive the same incentive as the commercial correspondent hired by the bank.
Different banks offer different incentives to business correspondents based on their performance.
For example, bank Vidharbha Konkan Gramin, a regional rural bank (RRB)
Provide RS 10 for each new account opened by the business correspondent.
If someone saves money through the PoS terminal, then the correspondent gets 0.
5% of the money.
For the mobilization of time deposits, the reporter got 0.
25 per cent of the amount.
Similarly, various incentives were provided to correspondents as part of the transaction amount.
\"Businessmen will now work as a business journalist.
Therefore, as an incentive for journalists, the fees paid will be extended to businesses, \"said Pandi.
He suggested that over time, as more and more merchants use the Aadhaar app for transactions on their phones, this will reduce the demand for bank correspondents.
The app itself has been tested by several banks and is being finalized, Pandi said.
The business model of UIDAI means that the banking system will assume incentives for aadhar-
Pay by phone.
By contrast, at the moment, they make a profit from other digital transactions.
But Mr. Pandi said that UIDAI convinced banks that they had to look at commissions based on the existing correspondent Commission structure and the cost of cash transactions.
Look at the cost structure of the POS machine used to conduct card transactions, which means a huge cost to the merchant. A third-
Third-party PoS providers have multi-tier charges.
These machines are not sold but are often rented by banks and third partiesparty vendors.
Some banks charge merchants a two-year monthly rent of Rs 400 for portable POS machines.
Some banks have also recovered what they call \"promised fees \".
These expenses may be a burden for smaller businesses with low sales.
Merchants with lower sales must pay higher commitment fees.
However, competition between different suppliers and banks has reduced these costs over time.
Banks such as the National Bank of India (SBI)and its public-
Industry Peers provide machines in a more relaxed condition than the thirdparty vendors.
For example, SBI says it doesn\'t need
Time installation fee for any merchant.
The last layer of the cost of using a POS machine is (MDR).
This is the fee that the bank charges from the merchant when swiping the card on the machine.
If the bank\'s own debit card is used on the POS machine, the bank usually charges a lower interest rate.
Before January 1, the charge was 0.
Transactions worth up to Rs 2,000.
For transactions above Rs 2,000, the transaction value recovered from the merchant.
Foreign cards are charged twice as much as credit card transactions. 5 per cent.
This is either borne by the merchant or passed on to the customer.
After the cancellation of the certification, the RBI added a layer of multi-drug resistance to the notice issued on December 16, 2016.
From January 1-3 to 31, multi-drug resistance for transactions up to Rs 1,000 will be 0. 25 per cent.
All others will continue to charge as always.
The upper limit for this ratio is 1.
Obviously, for a merchant who has no choice but to bear the cost or pass it on to the customer, the multiple costs add up to a considerable amount.
BI data show that PoS transactions through debit cards reached Rs 31,600 in November 2016.
This figure was RS 14,800 in November 2015.
Banks will obviously make money through these multi-level fees.
Mobile wallets are also considered to charge up to 4 cents for certain types of transactions.
Mobile wallet transactions were RS 3,300 in November 2016, compared to Rs 1,900 in November 2015.
The associated payment system may be a major spoiler.
At present, the national payment Corporation of India (NPCI)
AEPS through the bank charge 1 cent for each financial transaction.
The bank passed this to the merchant.
It is unclear whether these allegations will also be brought.
\'There will soon be a favorable decision,\' Mr. Pandi said.
If so, it will completely subvert the digital trading ecosystem.
The change in the business model of digital transactions requires the participation of many banks.
NPCI data display, in 46 public-
Sector banks and private banks in India, 44 \"member banks\" classified as AEPS \".