Niti Aayog’s new scheme to incentivise digital transactions

Alarmed over worsening situation due to unavailability of cash in banks, the government has pulled up its socks to bring the situation in order. Beginning with addressing woes of people at the merchant level, the Centre has tasked Unique Identification Authority of India (UIDAI) to roll out Aadhaar Enabled Payment System (AEPS) application.

The application, which will be Android-based, would be used for carrying out cashless transactions by using it through a smartphone and a fingerprint scanner. The best feature of this is that transactions on this application would be done without any card or entering any Personal Identification Number (PIN).

The application would be made available to all banks and they would encourage merchants in their vicinity to adopt this application, it added. The panel suggested that the RBI should allow authentication through iris scanner and One Time Password (OTP) for AEPS and there should be no charge on such transactions.

The decision in this regard was taken at Niti Aayog’s Chief Ministers’ panel meeting on digital payments which was held on Friday. The panel has also asked the government to roll out a more user friendly version of USSD or *99# from December 25, which is used on feature mobile phones for making cashless payments as misery due to demonetisation continues.

“Upgraded version of USSD (Unstructured Supplementary Service Data) should be rolled out by December 25,” suggested the panel on adoption of digital payments in its recommendation submitted to the Finance Ministry.

According to an official statement, the panel, whose convener is Andhra Pradesh Chief Minister Chandrababu Naidu, has suggested that the procedure for simplified Know Your Customer (KYC) using Aadhaar needs to be adopted.

The meeting followed the deliberations held by Naidu, Vice Chairman of NITI Aayog Arvind Panagariya with the Governor and senior management of the RBI and CMDs of major private and public sector banks on Thursday in Mumbai.

Meanwhile, the Niti Aayog has asked National Payments Corporation of India (NCPI) to conceptualise and launch an award scheme to incentivise people using digital mode for making payments through weekly and quarterly lucky draws. There will be two levels of incentive amounts available under the scheme — first, weekly lucky draws of the transaction IDs generated in that week for which the contours are being finalised, it said. Second, the Aayog has also proposed quarterly draw for grand prizes and asked NPCI that while designing the scheme, the focus will be on poor, lower middle-class and small businesses.