Aside from a slew of import duty slashes favouring the Make in India campaign, as well as pushes for renewable energy, the Government of India also unveiled measure to promote cashless transactions in the 2017 budget.
“Already there is evidence of increased digital transactions,” Finance Minister Arun Jaitley said in his address. “The BHIM app has been launched. It will unleash the power of mobile phones for digital payments and financial inclusion. 125 lakh people have adopted the BHIM app so far. The Government will launch two new schemes to promote the usage of BHIM; these are, Referral Bonus Scheme for individuals and a Cashback Scheme for merchants. “
For those of you who don’t remember, Prime Minister Narendra Modi launched the BHIM app (Bharat Interface for Money) on Dec 30 last year, with a view to promote a digital economy within the country. It uses the Unified Payments Interface (UPI) technology, launched in India in April 2016, which allows users to transact from accounts in various banks through one single app, even offering the possibility to shop in retail stores.
UPI is different from similar apps like PayTM and MobiKwik, as it links directly to your bank account, while the latter are digital wallets that require you to transfer money to them. BHIM’s UPI system uses IMPS money transfer, meaning you’ll be able to carry out transactions 24/7. The app also links directly to the mobile number registered to your bank account, as a means of verification.
Another feature of the app is that merchants can download the Aadhar cashless merchant app on their smartphones and sync it to a biometric reader. The customer can then put their Aadhar number into the app, select the specified bank and the biometric scan will work as the password for the transaction.
The 2017 budget also made mention of a new service called Aadhar Pay, a merchant version of Aadhar Enabled Payment System, that will be launched shortly. This is specifically for users who don’t have debit cards, mobile wallets, or even mobile phones. Banks have been tasked with introducing 10 lakh new PoS terminals by March 2017 and will be encouraged to introduce 20 lakh Aadhar based PoS by September 2017.