Research underway for Aadhar-based cashless payment in postal services

To facilitate digital transactions, the India Post is examining an Aadhar-based cashless payment mode for postal services said a senior official on Monday.

“If you give your credit card, debit card or Aadhar number in a post office, your bank link will come when your Aadhar number is entered,” B V Sudhakar, secretary, Department of Posts, told reporters here.

“Suppose, you have to make a registered post with some Rs 50 or Rs 20. That amount will be debited to you and credited to us. You don’t have to carry cash. This is being worked out to facilitate digital payments...It will be expanded all over India,” he said.

A software has been developed for the purpose by AP Technology Services and successfully tested at the General Post Office in Hyderabad, he said.

“We will test this on a pilot basis in some selected post offices in North, South, East and West (before rolling out),” Sudhakar said.

The Department of Posts is examining a proposal to allow installation of ATMs by any bank on the premises of the post offices.

“The proposal we are examining is, anybody can come and set up ATMs in the departmental post offices. They should pay us on the basis of transactions. It (the proposal) would be out approximately in one month,” he said.

The ATMs can be started in the 4,500 departmental buildings and the India Post Payment Bank (IPPB) is also working on having tie-ups with others, he said.

The IPPB, started with an initial capital of Rs 800 crore, has so far opened two branches at Ranchi and Raipur.

Sudhakar said 650 branches of IPPB would be opened with one being set up in every district by September 2017.

The IPPB would primarily focus on financial inclusion, Direct Benefit Transfer (DBT) and third party products.

The IPPB would emphasise on “door-step banking,” he said while expressing hope that the payment bank would be a “game-changer in rural economy.”

Noting that the Department of Posts has been aggressively pursuing financial inclusion by encouraging people to open savings accounts in post offices, he said the number of accounts increased from 33.03 crore in 2014-15 to 35.17 crore in 2016-17 upto February 2017.

“Rs 7.02 lakh crore is the outstanding balance in all these (35.17 crore) accounts. It speaks volumes about the efforts being made by India Post in the direction of financial inclusion,” he said.

The Department of Posts had a revenue of Rs 13,000 crore and an expenditure of Rs 19,000 crore in 2015-16. The gap in expenditure and revenue is around Rs 6,000 crore.

Observing that the expenditure is expected to rise in 2017 due to the implementation of the Pay Commission, he said the department would be able to make up for the deficit due to the new services.

He said 978 stand-alone ATMs have been installed at different post offices in the country and they have been made inter-operable from December 31, 2016.

India Post has worked with UIDAI to issue Aadhar cards through post offices and the service would commence from June 2017, Sudhakar added.