Aadhaar Pay, which was supposed to be the cornerstone of the government's digital payments push, is in jeopardy. Experts predict that it will now be limited to rural areas, where the majority of people receive government benefits and already have Aadhaar-linked bank accounts.
The Supreme Court's decision to end the mandatory linkage of Aadhaar to bank accounts will have an impact on the payment method that allowed users to conduct transactions using their unique identity rather than debit cards or other instruments.
Direct benefit transfers would continue to be tied to Aadhaar, according to the ruling. Customers should be able to utilise the system if they want to, according to a senior executive from a private bank.
Prime Minister announced Aadhaar Pay in April 2017 as a significant component of the government's financial inclusion and digital payments push for those without credit or debit cards. Its objective included increasing digital payments outside of urban areas.
While linking Aadhaar is no longer required, the simplicity of the identity-based payment system may mean it will continue in an optional form, according to a government official. This is more crucial in case of Money Transfer Services.
