Google Pay on Wednesday announced the launch of a new feature that enables users to register for Unified Payments Interface (UPI) using their Aadhaar number through the National Payments Corporation of India (NPCI). According to Google, the introduction of Aadhaar-based UPI onboarding aims to simplify the process for millions of Indian users and facilitate the widespread adoption of digital payments.

As per a recent report by Redseer Strategy Consultants, more than 40 crore people in India transact digitally. Customers use digital payment methods in 80 percent of transactions in the grocery, food delivery, and travel industries.

The report also said that PhonePe, Google Pay, Paytm, and Cred account for over 95 percent of the market share in UPI-based payments.

"The digital payments market is expected to grow to Rs 4,000 lakh crore by FY26 from the current Rs 3,200 lakh crore," the report added.

With this feature, Google Pay users can set their UPI PIN without the need for a debit card. Currently, this feature is available to bank account holders of supported banks, with additional banks expected to join soon.

According to data from the Unique Identification Authority of India (UIDAI), over 99.9 percent of the adult population in India possess an Aadhaar number and actively uses it at least once a month. Google said that the Aadhaar-based onboarding facility on UPI has been introduced to make it accessible to a larger number of users, thereby promoting financial inclusion across the country.

To onboard UPI via Aadhaar, users must ensure that their registered phone number with UIDAI matches the one associated with their bank account, and their bank account is linked with Aadhaar. Once these prerequisites are met, users can follow the steps outlined below for seamless onboarding:

On the Google Pay app, users can choose between a Debit Card or Aadhaar-based UPI onboarding. Opting for Aadhaar requires entering the first six digits of their Aadhaar number to initiate the process.

The authentication step involves entering One-Time Passwords (OTPs) received from UIDAI and their respective banks.

The user's bank will then complete the verification process, enabling them to set their UPI PIN.

Once the onboarding process is successfully completed, customers can use the Google Pay app to make transactions or check their balance. When a user enters the first six digits of their Aadhaar number, the information is securely sent to UIDAI via NPCI for validation.

“This process ensures the safety of users' Aadhaar number. Google Pay does not store the Aadhaar number and merely acts as a facilitator in sharing the Aadhaar number with the NPCI for validation,” Google said.