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Aadhaar Pay boosts digital payment in rural India over 6 times

By Newsd
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Aadhaar Pay boosts digital payment in rural India over 6 times
Image: iamWire

In a view to accelerating digital payments in the rural sector, government’s Aadhaar Enabled Payments Systems (AEPS), has shown an impressive growth of over six times.

“Banks have already deployed around 1.3 lakh micro-ATMs in the country, of which more than 1 lakh terminals are interoperable,” said AP Hota, chief executive officer of National Payments Corporation of India (NPCI).

“Aadhaar based payments is the right technology for rural India where literacy about security features for digital payments like OTP and password are lacking”, he added.

According to NPCI data, AEPS transactions has reached more than 6 million in October, a month before demonetisation was announced.

From about 2 million in December, the number of transactions has increased to 6.1 million in April. AEPS transactions are driven by microATMs being deployed by banks in rural India, where smartphone-based payments cannot work.

Interoperable microATMs allow customers to use any bank account to transact on any device, much like ATMs.

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Hota added that the success of the AEPS programme lies in the ability of the regional rural banks (RRBs) to deploy such solutions for their customers.

“We already have 53 RRBs offering interoperable AEPS services out of the total 56, and our target is to make all of them interoperable as soon as possible,” said Hota.

Driving away financial inclusions, microATMs allow banks to take banking to rural India in a cost-effective manner.

 “The cost-to-serve through a MicroATM is lower than that of a traditional bank branch. Hence, this network can be quickly ramped up and can enable digital financial inclusion at scale,” said Rajiv Lall, founder and chief executive officer of IDFC Bank.