Residents of India living below the poverty line soon may receive their government pensions and minimum wages via micro ATMs they would access using their Aadhaar identification numbers.
Under Aadhaar, the Unique Identification Authority of India is providing every resident of the country an ID number ascertained from fingerprint, facial recognition and iris scans. Consumers’ fingerprint information would double as their banking passwords, the authority has said.
The authority now plans to deliver scholarship funds to students in rural India and pensions to almost 2.5 million pensioners using their Aadhaar numbers, a spokesperson for the authority tells PaymentsSource.
“State-level agencies have to disburse the pensions, varying from 2 billion rupees [US$40 million or 30 million euros] to 5 billion rupees, for families below the poverty line in rural and urban India,” a spokesperson for the authority tells PaymentsSource.
The authority has submitted the plan to the Ministry of Finance and, pending the ministry’s approval, would implement it beginning next year, the spokesperson adds.
“Payments would be made by the micro ATM and the business correspondent structure that regional rural and cooperative banks have,” he says. “The plan calls for all government payments over 1,000 rupees to be made by a network of 1 million interoperable micro ATMs.”
To use the micro ATMs, customers first would identify themselves using their Aadhaar numbers, which would act as a virtual account for the government direct deposits.
“They would then need to biometrically authenticate withdrawals using their fingerprints, and the cash would be disbursed by the banking correspondents,” the spokesperson says.
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