Sunday, January 22, 2017

Issue of RuPay cards jumps post-demonetisation


Banks in the country have issued nearly 60 per cent more RuPay cards for Pradhan Mantri Jan Dhan Yojna (PMJDY) account-holders in the two months following demonetisation of ₹500 and ₹1,000 currency notes on November 8 than they had issued a year prior to that.
Banks had added around 2.83 crore new RuPay cards from November 25, 2015, to November 9, 2016. Compared to this, in just two months following demonetisation, nearly 1.56 crore RuPay cards were issued.
The number of RuPay cards increased to 19.43 crore by November 9, 2016 from 16.6 crore as on November 25, 2015.
Of the 26.68 crore PMJDY account-holders, nearly 21 crore (78.71 per cent) had RuPay cards by January 11.
RuPay card is an initiative by the National Payments Corporation of India (NPCI) to allow all Indian banks and financial institutions to participate in electronic payments.
Aadhaar seeding
In spite of the Prime Minister’s endorsement of JAM (Jan Dhan, Aadhaar and mobile) vision on several forums, the seeding of Aadhaar numbers with PMJDY accounts remained at 42 per cent of the total PMJDY accounts in November 2015. Of the 19.34 crore accounts, only around 8.19 crore were seeded with Aadhaar numbers as on November 25 2015.
The Prime Minister had stated that the JAM vision would serve as the bedrock of many initiatives to come.
Aadhaar seeding with bank accounts crossed the 50 per cent mark only in August 2016.
In the one year to November 2016, banks seeded 5.49 crore more accounts with Aadhaar numbers.
Of the 25.51 crore PMJDY accounts, around 13.68 crore were seeded with Aadhaar by November 9, 2016. During the post-demonetisation period between November 9, 2016, and January 11, 2017, banks seeded 1.67 crore more accounts with Aadhaar numbers.
Of the 26.68 crore PMJDY account-holders, nearly 15.36 crore (57.58 per cent) were seeded with Aadhaar numbers by January 11.

Centre pushes for fingerprint money transactions through Aadhaar Pay



Keen to push digital payments among the poor and illiterate in rural areas of the country, the government is pushing to popularise Aadhaar Pay which ensures financial transactions by just using fingerprint.



Aadhaar Pay, which is merchant version of the already in use Aadhaar-enabled payment system (AEPS), will become an alternative for all online and card transactions which require password and PIN.



The app facilitates merchants to take cashless payments from a customer who is only required to give his Aadhaar number, name of the bank (from where the money is to be deducted) and finger print for authentication. Unique Identification Authority of India (UIDAI) CEO AB Pandey said Aadhaar Pay works on any android-based phone, even a low cost one, with an attached finger biometric device.



"This ensures digital transactions which are cardless, PINless... There is no need of smartphone for the customers," he added. In order to popularise the use of Aadhaar Pay among merchants, the government has asked banks to enrol 30-40 merchants per branch so that they are able to take cashless payments from customers.



At present five banks — Andhra Bank, IDFC Bank, IndusInd Bank, State Bank of India and Syndicate Bank — have gone live over Aadhaar Pay and several banks are in the process of launching pilots on the app.



A senior official said the plan is to identify Aadhaar Pay transactions separately and to incentivise merchants for long-term sustainability and scalability of the system. As it needs a biometric device costing about Rs 2,000, the government is also working on an incentive model so that cost of the device is amortised over time and the merchants are encouraged to use it.

Rejecting security concerns over AEPS, the UIDAI CEO said transactions using Aadhaar Pay are much more secure than any other digital mode of transaction, both in terms of technology and process. Besides the merchant using the app being enrolled in the bank and the customer's bank account linked to Aadhaar, he said the biometric data get encrypted leaving little scope for any misuse. 

"Fingerprints can't be copied as it get encrypted. Even if any merchant or customer tries to misuse the fingerprints, he will be caught immediately as the location of merchants using the app is known to the bank," he explained.



The AEPS platform, launched in December 2012, enabled people to carry out banking transactions over hand-held devices (micro ATM) using the Aadhaar number and fingerprints. The Andhra Pradesh government has launched cashless payments at most of the fair price shops (FPS) and Gujarat, in partnership with CSC e-governance, has launched cashless payments using AEPS platform at over 3,000 fair price shops.