India’s Rupay Domestic Payment System Aligns With ID Initiative

The National Payments Corp. of India plans to link Rupay, India’s soon-to-be-launched domestic payment card scheme, with the country’s Aadhaar resident-identification program.

First conceptualized in 2008, the domestic payment card, earlier called IndiaPay, had been delayed by more than three years because of operational and organizational issues. The corporation in March renamed the scheme and said the first domestic magnetic stripe Rupay cards would be issued to no frills accountholders of at least four state-owned banks in the country (see story).

A spokesperson for the payments corporation now tells PaymentsSource that Rupay cards will be linked to the customer’s Aadhaar identity number. “What we will see then is banks issuing Aadhaar Rupay cards,” he says.

Under Aadhaar, the Unique Identification Authority of India will provide every resident of the country an identification number ascertained after undergoing fingerprint, facial recognition and iris scans. This ID number will be issued to all residents of the country, and consumers’ Aadhaar fingerprint information would be their banking passwords.

A pilot is under way in the state of Jharkhand in collaboration with three banks–Bank of India Ltd., Union Bank of India Ltd. and ICICI Bank Ltd., the official tells PaymentsSource. To withdraw or deposit money, customers first must approach their local banking correspondent, who will have a biometric reader connected to the Aadhaar-Rupay system, he adds.

“After swiping the card, the cardholder will have to enter his Aadhaar number and then impress his fingerprint on the reader to authorize the transaction,” the official says. “However, for now, cardholders would have to transact with only their bank, as interoperability between banks on the system may take time.”

The Unique Identification Authority of India has more than 4.5 million individuals on its rolls and hopes to issue 600 million Aadhaar numbers by 2014.

Rupay is not the first to co-partner with Aadhaar. Visa Inc. earlier announced that individuals registered under the authority would be able to get a payment card from a Visa partner bank after verifying their identities through the Aadhaar scheme (see story).

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