Note this! Only 14 Banks Bank on Aad­haar Link

The Economic Times - - Disruption: Startups & Tech -

Surabhi Agar­wal & Pratik Bhakta

New Delhi: Even as the gov­ern­ment is work­ing on a war foot­ing to launch the much touted Aad­haar Pay — the bio­met­ric-based pay­ment sys­tem an­nounced by Prime Min­is­ter Naren­dra Modi in De­cem­ber — the coun­try’s top banks are drag­ging their feet on its pre­cur­sor which is the Aad­haar pay­ment op­tion in the BHIM app.

The fea­ture, which en­ables pay­ment to an Aad­haar num­ber linked to a bank ac­count, was made live on the BHIM app about a month ago. How­ever, only 14 banks — rel­a­tively small in size — have en­abled the fea­ture so far. Al­most all the large banks such as the State Bank of In­dia (SBI), HDFC Bank or Pun­jab Na­tional Bank (PNB) are yet to come on board.

The de­lay has miffed some in the es­tab­lish­ment who feel that since al­most 112 crore peo­ple have Aad­haar and 40 crore bank ac­counts are al­ready linked to the unique iden­tity num­ber, the pay­ment op­tion can pro­vide a big boost to dig­i­tal drive.

In­dus­try in­sid­ers say de­lay could be be­cause, due to the gov­ern­ment dig­i­tal drive banks are be­ing asked to ac­ti­vate so many fea­tures si­mul­ta­ne­ously, such as the re­cently launched BharatQR code, and Aad­haar-en­abled pay­ments, lead­ing to a lot of bur­den on them. Peo­ple on the other side, how­ever, said that banks are not in favour of th­ese new trans­ac­tion meth­ods since it may can­ni­balise on their debit card or credit card us­age which gets them a per-trans­ac­tion fee. “When 14 small banks can go live HENRI MARTIN, in a month’s time, why can’t the big banks do it,” a gov­ern­ment of­fi­cial said, adding that even be­fore BHIM, when banks had to launch their in­di­vid­ual UPI apps, the fea­ture was not en­abled by them.

When asked, spokesper­sons of SBI and HDFC Bank told ET that the in­te­gra­tion work is in progress and the fea­ture will go live “soon”, with­out spec­i­fy­ing any time­line. The of­fi­cial said that the un­avail­abil­ity of big banks was re­ally scut­tling the drive since a ma­jor chunk — 90-95% — of the Aad­haar-linked bank ac­counts are with the large banks. “Un­less the SBIs, PNBs or the Bank of Bar­o­das of the world don’t en­able the fea­ture, how will the trans­ac­tions hap­pen?”

While 17 mil­lion peo­ple have down­loaded the BHIM app so far, ₹ 361 crore worth of trans­ac­tions have hap­pened through it. The value of trans­ac­tions has also in­creased from ₹ 21.3 lakh per day on De­cem­ber 30 to ₹ 25.73 crore on Fe­bru­ary 13. The of­fi­cial added that trans­ac­tions through the Aad­haar fea­ture on BHIM are “min­i­mal” so far. “Out of the 40-crore linked ac­counts, 39 crore are with the big banks, if they are not on board, where will the trans­ac­tions come from?” said the per­son.

An­nounc­ing the Union Bud­get, fi-

nance min­is­ter Arun Jait­ley had set a tar­get of achiev­ing 2,500-crore dig­i­tal trans­ac­tions in 2017-18.

Fear­ing trans­ac­tion fail­ures, the gov­ern­ment is also re­sist­ing from launch­ing a me­dia cam­paign to ed­u­cate peo­ple about the fea­ture till a ma­jor­ity of the large bank come on board.

“Sup­pose we go all out with fea­ture and peo­ple try to send money to a bank, which has not en­abled it, then they will say BHIM is not work­ing. We don’t want that to hap­pen,” added the of­fi­cial. Only one large bank, ICICI, has en­abled the fea­ture so far, and the in­te­gra­tion has also hap­pened only this week.

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