This afternoon the Prime Minister unveiled BHIM – an Android app from NPCI with an equivalent USSD-based *99# service.
Additionally, recently one of the banks launched AadhaarPay – a capability that allows merchants to collect payments from consumers with their Aadhaar# and fingerprint.
There has been a bit of confusion about the role of Aadhaar in BHIM – so this blog clarifies.
BHIM/SmartPhone – the Android and soon iOS app – is a UPI app – no different from PhonePe or any other bank applications. It has been developed by NPCI and is a common application across all banks. As with ALL UPI apps, BHIM has NO connection to Aadhaar – the customer is authenticated by his issuing bank using his Mobile# and MPIN and nothing else. Of course this app conforms to all the security-standards of any UPI application and has gone through the rigorous certification process.
*99# is merely a USSD front-end to the same capabilities. It does exactly what BHIM does but can be accessed on all phones – SmartPhones and Feature-Phones.
Aadhaar itself has NO direct role to play in BHIM – whether on Android or USSD/*99#.
So what is AadhaarPay?
AadhaarPay – leverages the Aadhaar-linked bank accounts to allow payments to a retailer. The payer need not provide anything more than an Aadhaar number and their biometric to the payee. The retailer receiving a payment needs to have a SmartPhone with an Aadhaar-approved secure Biometric Sensor and a certified AadhaarPay application. In this case the security-standards for customer data and biometric must comply both with UPI’s transaction level security and Aadhaar’s biometric security. In the case of AadhaarPay – ONLY Authentication is performed by Aadhaar/UIDAI – the transaction details are never sent to Aadhaar. Think of it as Authentication is done by Aadhaar and Authorization by NPCI/Banks.
One instance of AadhaarPay was released last week by IDFCBank and over time one may see a common AadhaarPay app that at the front-end uses Aadhaar for authentication and the BHIM/UPI back-end for authorization for users who don’t have a mobile phone.
National Pride Moment
The UPI platform, BHIM, *99# and AadhaarPay are great state-of-the-art platforms and applications that are a boon to all Indians. 2016 has been a great year in Payments progress worldwide – and India is leading the way!
With BHIM, *99# and AadhaarPay, the entire 1Billion plus population is now covered with a state-of-the-art real-time payments system. Those who have Smartphones will get the rich-app experience, those who have feature phones will use the USSD interface and the rest will merely need Aadhaar# and their fingerprint/IRIS biometric for to make payments.
3-Cheers to NPCI and the government for blazing such a fabulous trail! The new Twitter handle @NPCI_BHIM is a great way to stay informed about future developments regarding BHIM!
Guest Post by Sanjay Swamy, Entrepreneur & Early-Stage VC! IndiaStack Evangelist
I wish all readers a happy end of 2016 and an awesome year in 2017 – Payments geeks will indeed have a lot of fun working on UPI and the new world of interoperable, secure and universal payments!