While India Inc is keeping pace with digital transformation that the government is pushing, in a meetings with financial technology committee of bankers and government representatives, an attempt was made to make digital payments free of cost and route them through the Aadhaar database.

What do you need to know as a CFO?

1: Payment gateway has seen lot of changes over the years through virtual currency, e-wallets, netbanking or M-pesa and so on. Now, by using Aadhaar card, the government is planning to use the biometric readings and making payment through fingerprint as security clearance.

2: A news report in the Economic Times stated the following example: Imagine buying goods at a merchant outlet and paying by just punching in the Aadhaar number, amount to be paid and fingerprint as your security clearance -no card, no smartphone, no Point of Sales terminals required. Though it may sound more like a tech mumbo-jumbo, the use of Aadhaar-enabled payment system and the opening up of the Aadhaar database is on the verge of making it a reality.

While private sector lender IDFC Bank has introduced biometric readers at merchant outlets for payments through the Aadhaar, railroads, bankers and the government are looking at ways to make this the main way to pay . “In case of card transactions, the cost of the terminal and the technology of service providers always bring in the concept of extra charges per transaction.

3: In the discussion with the government bankers pointed out that if the transaction is done through the Aadhaar network, there's no need for extra charges. “The extra charge was a major impediment for consumers to pay digitally, and instead they opted for cash,“ they said.

“The solution that we have come up with will directly benefit the bottom rung of people who do not need mobile phones, plastic cards for digital payments -they just need to be enrolled with Aadhaar,“ said a senior IDFC Bank official. “There are 109 crore people enrolled with Aadhaar, hence this mode could be the most preferred mode of payment.

Time to step-up

However, this is the time for CFOs to step up their game, be aware of the rapid changes happening in this space and need to prepare themselves for a digital economy, eliminating hard cash, plastic cards and eventually moving to a biometric system of payment.

“ IDFC Bank has rolled out biometric readers at their business correspondents' outlets to allow them to accept payments through fingerprint scanning from any bank customer. Even SBI has introduced Aadhaar based payments solution recently.

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