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Visa launches new payment service in India in partnership with UIDAI, leading banks

Visa has entered into a partnership with five of India’s leading banks to provide Aadhaar holders access to a Visa account. This new initiative brings together Visa, Unique Identification Authority of India (UIDAI) and banks like Axis Bank, HDFC Bank, ICICI Bank, Indian Overseas Bank and the State Bank of India and aims to provide millions of Indians with access to financial services and electronic payments.

Aadhaar is a 12-digit individual identification number issued to the residents of India by the UIDAI on behalf of the Centre.

The new account, ‘Saral Money’, will use biometric information (like fingerprints) to verify and authorize payments. Both the account and the associated biometric data will be securely hosted by UIDAI.

According to the company, this will solve a long-standing problem of the authentication of citizens who do not have an existing bank account or adequate forms of identity proof, thereby enabling banks to exponentially expand their customer base in the country.

Elizabeth Buse, group president, Asia Pacific, Central Europe, Middle East and Africa (APCEMEA), Visa Inc., said, “This initiative solves the customer identification problem when it comes to opening bank accounts in India.”

By linking Visa accounts to the national identity system, customer identities can be verified via biometric recognition (like running fingerprint scans at newly designed micro-ATM’s) when they wish to pay or withdraw cash. The Micro ATMs are portable biometric Point-of-Sale (PoS) devices and laptops designed to overcome the lack of bank branches in secluded parts of the country. Also, Saral Money is not restricted to a specific bank or region and is instead aimed at the 210 million existing Aadhaar cardholders, with an aim to eventually expand to 600 million- the UIDAI’s target for 2015.

Once an individual receives an Aadhaar, he/she is automatically eligible for Saral Money and they just need to provide their Aadhaar registration letter at a bank to be issued with a bank-branded Visa account immediately. After opening their account, they can then use Saral Money to make purchases, send money, or receive government payments electronically. Saral Money is also aimed at ensuring that government disbursements are effectively transmitted and efficiencies are built within the system.

Phase 1 of the Saral Money programme will see the account rolled out in New Delhi and the NCR region, with expansion to the rest of the country targeted for completion by the end of 2013.

(Edited by Prem Udayabhanu)

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Mukesh Kamath December 15, 2012 16:22

It is essential to partner with visa as they have lot of experience in issuing cards. Aadhaar scheme if it has to be successful has to ensure that banking reaches the aam aadmi.