In the current times, Aadhaar has become an integral part of the day to day life. A lot of our day to day activities and transactions involve the verification of Aadhaar. Let’s understand the role Aadhaar is playing in the business world by being an integral part of our lives.
The Indian Government made its motives clear towards becoming a cashless economy by introducing the Unified Payment Interface (UPI). It enables people to make payment through their Aadhaar or biometric print.
Aadhaar, over the years, has become an integral part of our day to day life. However, there is also a possibility of integrating aadhaar in the business world and the economy at large. The use and integration of Aadhaar in our daily lives is very much connected with the role of Aadhaar in the business world. Let’s take a deeper dig into this:
After the demonetization, aadhaar has been accepted widely in the banking and financial markets. After the demonetization government encouraged digital payments which ultimately led to wide acceptance of aadhaar as verification to ensure that digital payments and accounts are secure.
Owing to this, the Unique Identification Authority of India (UIDAI) has developed two platforms:
- Aadhaar Enabled Payment System: This system leverages Aadhaar online authentication enabling aadhaar linked bank accounts to be operated any time from anywhere.
- Aadhaar Payments Bridge: This system is more related to facilitate seamless transfer of funds to the resident beneficiary by using their Aadhaar Enabled Bank Accounts.
Unified Payment Interface
From the time of launching the Unified Payment Interface (UPI), the Government has been clear in its motive to move towards a cashless economy. The Aadhaar based Unified Payment Interface enables an individual to make a payment just by using his/her Aadhaar card or biometric print. To receive payment, the merchant must facilitate the interface to make the transaction, and the Aadhaar Linked Bank Account will make the payment.
Before the Udyog Aadhaar was introduced, entrepreneurs had to file two separate forms EM-I and II. The filing of Entrepreneurship Memorandum (EM) is not mandatory. Besides its process is too cumbersome, because of which many MSMEs have not registered for it and they are missing out on the services offered by the Government from time to time.
However, the introduction of Aadhaar has simplified the process. Thus, entrepreneurs are now able to file or register for MSME or SSI by completing the registration process online through Aadhaar.
National Rural Employment Guarantee Act, 2005 (MGNREGS) already has the provision of Aadhaar linking. Under the Act, the subsidy or the payment is credited directly in the bank account of the Aadhaar holder, which can be possible only when the bank account is linked to Aadhaar. The same can be done in semi-urban and urban areas for payment and record-keeping.
Employees Provident Fund Organization (EPFO)
Linking Aadhaar to your provident fund is not mandatory; however, doing so makes various processes easier. When you link your EPF and Unique Identity Number (UAN) with your Aadhaar, it enables you to receive the due amount directly in your bank account which is linked to Aadhaar
Other Uses of Aadhaar
Start-ups can receive their investment or funding through their Aadhaar Linked Bank Account, which will increase the credibility of transactions and ensure the security of funds. It will also verify the legitimacy of the start-up and its founders, along with creating transparency in the financial market.
Background check and criminal history check of the employees can also be made through Aadhaar.
Aadhaar can also be sued by banks and election commission to clean up their records and remove duplicate entries.
Aadhaar has almost become a mandatory verification document to continue doing digital transactions or payments through various platforms. The acceptance of Aadhaar as a verification document for a digital wallet and its usage picked up pace after demonetization. The Unique Identification Authority of India (UIDAI) has developed Aadhaar Enabled Payment System to leverage online authentication of aadhaar and enabling the operation of Aadhaar Linked Bank Account from anywhere at any time. In addition, Aadhaar Payments Bridge enables easy transfer of funds to the intended beneficiary using the Aadhaar Enabled Bank Account.
Introduction of Aadhaar has also simplified the process of registration for MSME and SSI under Udyog Aadhaar. Aadhaar linking is already mandatory in the National Employment Guarantee Act, 2005 (MGNREGS). The payment is credited directly in the aadhaar linked bank account in rural areas. The same can be done in semi-urban and urban areas to make payment and maintain records.
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