BHIM itself recently integrated Aadhar within the app just recently. For now, 14 Indian banks have come on board for Aadhaar Pay and the government is in talks with other banks too. Presenting the Union Budget 2017 today, the FM said that banks across India are advised to set up 20 lakh Aadhaar based PoS (Point of Sale) terminals by September 2017. “A shift to digital platforms will benefit the common man,” he added. In addition, the FM set a target of 2,500 crore digital transactions across platforms like BHIM and UPI.

Further promoting digital transactions, the Finance Minister also proposed that a new Payment Regulatory Board be set up within the purview of the Reserve Bank of India (RBI). He also said that the Government will take steps to promote digital payments at petrol pumps & hospitals. "The continued focus on moving India towards a more transparent and digital economy is encouraging, in order to really capitalize on the long term gains of the painful demonetization exercise," said, Partha Iyengar, VP and Gartner Fellow, India for the Indian IT sector. 

With these announcements, the Government seems to have made it pretty clear that it will stand by its cashless economy initiative. As of now, an approximate 39 crore bank accounts are linked with Aadhar cards and around 111 crore people are registered on the UID platform.

Commenting on the Budget, Vijay Shekhar Sharma, Founder & CEO - Paytm said, "It is a digital economy budget. Government has pushed the digital theme in every area of the budget. Every person from a small shops to consumers are pushed towards the digital economy. Tax benefits, incentives to use digital payments and extending loans based on a digital footprint will create a larger merchant ecosystem for digital payments. Incentives for labour intensive sectors including housing,  farming and dairy will help SMEs to create new jobs. Focus and attention to bank NPAs, as well as increasing bank capitalisation is great step towards strengthening the financial system of the country. Finally, the income tax rate changes will encourage more people to report their incomes and create a larger tax net for the country. Overall, it is a great budget that will encourage people to move to the formal economy and derive benefits." However, If incentives are given to Aadhar pay and digital transactions through BHIM, we could also see competition heating up for the likes of Paytm, which is currently dominating the digital payments space.