The Prime Minister scrapped 500 and 1000 rupee notes on November 8th 2016. This move not only destroyed black money and dealt a severe blow to terrorism in India, it also pushed India towards becoming a cashless economy. When all citizens of a country transact using digital modes of payment, India becomes a cashless economy. Today, you and other citizens transact (make and receive payments) using mobile wallets, credit and debit cards, UPI, BHIM App, Aadhaar enabled payment systems and even Bharat QR Code.
Let’s rewind to the times before demonetization. More than 95% of transactions took place in cash. Even today, a lot of transactions take place in cash. But, the use of digital modes of payment is growing real fast.
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Your 12-digit Aadhaar Number, can help you make payments, just by using your fingerprints. You go to a store and buy a watch. How do you make the payment? Simple…You can make the payment, using the Aadhaar enabled payment system. This is nothing but a micro-ATM. The merchant at the store will have a Smart phone attached to a biometric reader (finger print scanner). This is similar to the POS Machine, where you swipe your credit/debit card, enter the amount, key in the PIN and make the payment.
The difference in Aadhaar enabled payments….Instead of using a card; you authenticate the payment, using your fingerprints.
The merchant enters your Aadhaar number and the amount you have to pay, in the micro-ATM. (Smart phone attached to a fingerprint scanner), using the touch interface. You have to authenticate the payment using your fingerprints. To do this you have to place your finger on the fingerprint scanner. The money will be deducted from your bank account which is linked to the Aadhaar number. This money gets debited from your account and credited to the merchants account.
Soon, you will be able to send and receive money, even without a bank account. Your 12-digit Aadhaar number can help you send and receive money, even without linking it to a bank account. This is possible thanks to the IndiaPost payment bank, which will soon be launched in September 2017. IndiaPost has a vast rural network and can easily promote financial inclusion (banking and financial services reach each citizen), in India.
How can you send and receive money without a bank account? Simple….Aadhaar will become a payment address, helping you to send and receive money, even without a bank account. If you already have an Aadhaar, you can receive money/payment from any source. The UIDAI (Unique Identification Authority of India), has run a pilot programme to test this system. SBI and some other banks, were involved in the process.
There’s a great saying “We live in interesting times.” You have learnt how to use fingerprints and make a payment. You have learnt how to send and receive money, even without a bank account. What’s next, let’s find out? Be Wise, Get Rich.
Mr. C S Sudheer is the founder and CEO of IndianMoney.com – India’s largest Financial Education Company. He started his career with ICICI Prudential Life Insurance and later on worked with Howden India. After his brief stint in Howden India, he moved on and incorporated Suvision Holdings Pvt Ltd which is the sole promoter of IndianMoney.com. He aims to build a nation that is financially literate with investment savvy citizens.
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