In most emerging markets, the payment acceptance network remains spotty and underdeveloped. FSS AadhaarPay disrupts India’s traditional POS-driven business models by leveraging the ubiquity of mobile connectivity and the National ID (Aadhaar) to address this infrastructure gap and drive digital payments growth.
FSS AadhaarPay enables banks to roll-out a wide-scale digital acceptance. payment network by facilitating payments through biometric authentication, without the need for a physical payment instrument. The low-cost solution removes the need for merchants to invest in expensive POS equipment and completes transactions using just a mobile app and a biometric reader.
This helps banks rapidly expand the merchant ecosystem by increasing the number of acceptance points in a cost-effective manner.
The Aadhaar Payment System supports an efficient onboarding process, enabling quick service expansion. A simple and paperless eKYC process verifies merchants instantly via the Aadhaar Payment System. Merchants registered with the bank can set themselves up within minutes by installing the mobile app and submitting their Aadhaar number and biometrics to complete verification.
How it Works
The service leverages the universal availability of the mobile device and Aadhaar - India’s biometrically-enabled digital identity -- that covers 99% of the populace to advance the growth of digital payments. Envisaged as an open platform, the Unique Identification Authority of India, allows payment service providers to consume APIs, “on-demand” to authenticate customers. Besides leveraging Aadhaar for establishing user credentials, the national identity also serves as a financial address that can be directly linked to the customer’s bank account. Any merchant with a biometric reader and an Android phone can download the AadhaarPay application to accept payments by scanning
the customer’s fingerprint and entering the amount at the point-of-sale (POS) terminal.
FSS AadhaarPay uses APIs exposed by UIDAI to authenticate the customer’s biometric credentials mapped to the social security number. On successful authentication, the transactions are routed to the customer’s issuing bank.
Merchant installs FSS
Merchant downloads FSS AadhaarPay App and attaches a UIDAI certified scanner to the smartphone
Submits Aadhaar number and biometrics for eKYC and is onboarded instantly
Enters the customer's Aadhaar number, bank name and amount for payment
Captures customer's fingerprint using the biometric scanner
On successful authentication of the customer, funds are instantly transferred from customers account to merchant's bank account instantly
Lightweight Merchant App
FSS AadhaarPay offers merchants a mobile app that is easy to use and compatible with all Android devices. Merchants can initiate a payment transaction via the app in a few simple steps. Using the app, merchants can quickly:
Scan QR code
Merchants can scan the QR code on the customer’s Aadhaar card to quickly pre-populate details such as name and is compatible Aadhaar number. This eliminates need to type in customer details for every payment transaction, optimizes checkout time
View transaction history
Merchants can view details of all sales transactions and access details regarding the payment status of a specific order/transaction
FSS AadhaarPay instantly notifies merchants on transaction events to help merchants stay updated and track payment status
Generate digital receipt
Merchants can generate a receipt for every transaction and SMS details to the customer. A proof of purchase for every transaction lowers dispute volumes
Merchants can self-manage accounts and update any account related information over the app
Facilitates Immediate Credit in the Merchant’s Account
FSS AadhaarPay uses the bank account as a source of funds and all transactions are cleared and settled using the IMPS network (India’s real-time fund transfer network), ensuring immediate crediting of accounts.
For on-us transactions, FSS AadhaarPay interfaces with banks system for instant transfer of funds from the customer’s account to the merchant’s account.
For off-us transactions, payments are routed through NPCI infrastructure and on confirmation, FSS AadhaarPay will facilitate real-time credit of funds into the merchant’s account.
FSS AadhaarPay shares reconciliation files with the bank at the end of each day for transaction settlement.
FSS AadhaarPay can effectively identify and manage all kinds of risks. Strong internal controls and tools help prevent fraud and address:
FSS AadhaarPay offers a wide range of reports to help banks and merchants monitor business performance. Daily, weekly and monthly transaction reports help banks and merchants understand service adoption patterns and accordingly design strategies to grow user base and expand services.
Transaction Analysis - Provides merchants and banks a snapshot of transaction activity including:
Successful transactions by payment type - Aadhaar, QR codes, UPI for visibility into the usage and revenue across different channels
Transactions grouped by status - Success, failure, reversal, timeout, helps banks identify transaction problems relating to excessive denials, transaction failures or response times
Region performance - Drilldown view of adoption patterns at a regional level aids with business planning
Failure analysis - Banks can view failed transactions, identify root cause for failure and take corrective measures to improve success rates
Maintains High Security Standards
FSS AadhaarPay’s multi-level security enforcement always ensures maximum
protection for data and users
Complies with UIDAI security standards
Supports biometric devices that are certified by UIDAI for payment acceptance. Transactions originating from non-certified devices are automatically rejected
Supports SSL keys
Supports encryption for Protects against sensitive information in transit
Complies with OWASP policies
Protects against application related vulnerabilities and threats
Benefits to Banks, Merchants
Benefits to Banks
Broadens Merchant Ecosystem
Expands digital acceptance especially among small merchants with lower set-up costs, ease of use, convenience and simplified onboarding
Reduces Acquisition and Servicing Costs
Self-onboarding and registration for merchants improves operational efficiency and reduces acquisition costs
Benefits to Merchants
Expands Addressable Market
More than 99% of the population in India has a National ID enabling merchants to tap into a wide addressable customer base
Lowers Interchange Costs
Nominal charge for each transaction lowers costs of accepting payments digitally
Immediate fund credit into merchant accounts improves cashflows and frees locked capital for productive redeployment
Reduces Operational Costs
FSS AadhaarPay requires minimum costs to setup as the merchant needs to only download the App on his mobile phone and attach a biometric scanner. This helps merchants save on setup costs as well as rental charges for operating a POS terminal. Administrative costs and security risks associated with handling cash and deposits are also reduced with digital payment acceptance
Merchants have access to a broader customer base and are able to complete transactions that would not otherwise be possible
Improves Customer Experience
A simple and convenient checkout experience for customers improves transaction fulfillment rates
Benefits to Customers
Simplifies Transaction Experience
Allows customers to transact without having to use plastic cards, mobile phones, passwords or PIN
Biometric authentication improves security and convenience by eliminating the need for users to enter passwords