Going one step further beyond complete electronic loan disbursal it is now time for initiation of paperless auto debit facility as well for customers thereby taking the complete process digital.
eMudhra which manages digital identity and transaction for customers has launched Aadhaar eSign based authentication for NACH (National Automated Clearing House) mandate with National Payments Corporation of India for large and small enterprises to collect recurring payments from their customers. This will help organisations bypass the requirement of wet signature for customers which can allow entities to deduct recurrent payments from their accounts.
This could disrupt the finance process by taking it completely paperless, reduce cost and even increase accountability in the payment process.
“An eSign-based NACH is one such transformational initiative that is expected to drive huge cost savings to the ecosystem and promote the drive to move digital and cashless. We’re working with the NPCI and various central and state government bodies to help simplify payments and bring about digital inclusiveness,” said V Srinivasan, chairman of eMudhra.
The biggest advantage of a paperless authentication is that it removes geographical barriers, ensure efficient banking for customers and also reduce transaction costs for the corporates.
Srinivasan said that eMudhra has been working with several banks in this initiative and expects to handle over 25 to 30 million transactions in the next one year. This partnership would enable banks, insurance companies, mutual funds, fintech firms to collect payments without submission of physical forms.
“Currently we are working with 22 partners across destination banks, sponsor banks and corporates who can avail this facility. By the end of the year, we plan to work with at least 100 partners,” said Srinivasan.
In order to complete the eSign verification process, customers will interact with the bank, the insurance company or other corporates like a telecom company through their website to initiate a mandate. The customer will be redirected to e-Mudhra’s mandate gateway to complete eSigning of the mandate.
