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Aadhaar Enabled Payment System (AEPS)

As per the information provided by K. J. Alphons, Minister of state for Electronics and IT, more than 89 percent of the population has been issued Aadhaar cards as on February, 2018. This means that out of 1.31 billion people of this country, 1.17 billion people have been issued Aadhaar cards. With India moving towards being digital India, the dream to achieve this is one step closer than before with the introduction of Aadhaar Enabled Payment System (AEPS). AEPS is developed by the National payment corporation of India (NPCI). It allows easy access to basic financial services through a micro ATM by just entering your Aadhaar pin and verifying it with your fingerprint. The primary objective of AEPS is to make access to services like cash deposit and cash withdrawal, or making a payment less complex and more fast and secure. AEPS eliminates the traditional use of cards to complete a transaction. You don’t need any document or signature to complete a transaction.

Not only is AEPS fast but also provides security against fraudulent activities otherwise associated with card payments. In order to complete a transaction, the person would require verifying his finger print to authenticate the transaction. AEPS can be availed at any banks or banking correspondent regardless of an account is maintained with that bank.

Benefits of AEPS

You can pay money for your purchases, make cash deposits and withdrawal, check balance, and get a mini statement of your transactions. AEPS has enabled to make payments securely for your purchases completely cashless and card less. By using a micro ATM you can also deposit and withdraw cash, check your balance and also avail a mini statement.

AEPS can be used through Micro ATMs.

Micro ATMs are card swipe machines which come equipped with fingerprint scanners. These are handy as they can be carried to remote locations by bank correspondents. In short, they are mini ATMs.

There is no need of a debit card.

Usually one would rely or need a debit card to withdraw cash or to make a payment against a purchase. This is eliminated through AEPS as AEPS allows you to withdraw cash and make a payment with the help of your Aadhaar card number and your fingerprint.

Fast and secure.

Since the Aadhaar is unique and is made up of using an individual’s biometric data (Iris or fingerprint), it reduces the chances of any fraud. On successful transaction, a receipt is generated and your bank also sends you a SMS about your transaction. It is not just safe but also fast it doesn’t involve any multiple or complex steps. People in the rural area are often overwhelmed while using an ATM. AEPS makes it easy for them to withdraw or deposit cash.

Any banking correspondent can reach far off rural places with micro Pos.

The goal of financial inclusion is to take banking to the unreached clients in the rural sector. Banking in the rural places has not been entirely implemented. There are several parts in the country where there is not even a single ATM facility. For such places, a banking correspondent can reach with a Micro ATM handy. A Micro ATM does not hold cash in the machine. The correspondent carries the cash along with him and instant cash facility is availed through Aadhaar pin and fingerprint.

Shopkeepers and merchants can also use AEPS to receive payments.

Now receiving payments is as easier as making payments. AEPS can also be used by shopkeepers and merchants to receive payments. This makes it convenient for both the parties to make and receive payments.

Types of AADHAAR Enabled Banking Transactions

Aadhaar enabled payment system provides an easy and fast access to basic financial services such as cash withdrawal and cash deposit, making instant payments, or to simply check your balance. This is enabled through Micro ATMS and all you need is your Aadhaar number and your fingerprint.

Cash Withdrawal

Micro ATMs are not really capable of holding cash in the machine. Cash is actually carried by the banking correspondent with him and you can make a transaction by simply using your Aadhaar number and finger print and input the amount you wish to withdraw.

Cash Deposit

Cash is also deposited by following similar steps and once the said transaction is done, a receipt is generated and your bank also notifies you by sending you a SMS on your registered number.

AADHAAR TO AADHAAR funds transfer

This type of funds transfer is used by shopkeepers or merchants for their payment facility. Payment from the buyers account is transferred to the sellers account through the AEPS.

Balance Enquiry

You need to simply visit the nearest banking correspondent in your area and enter your 12 digit Aadhaar number and select the type of transaction (in this case select balance enquiry) on the screen to view your balance.

How Does AEPS Work

By just remembering 12 digits, you can avail basic financial facilities. The Aadhaar number is linked to your bank account and to authenticate a transaction or avail a facility under AEPS you would require to use your fingerprint that is authenticated with your Aadhaar. Only after authenticating your fingerprint by the UIDAI, your transaction is completed by the bank. For instance, a man claims to be ABC, and produce the Aadhaar number linked to ABC's name. ABC wishes to make a transaction to pay for his purchases made from a merchant. To verify ABC, ABC would require furnishing his fingerprint, if it matches with the fingerprint, and then the bank will proceed with the transaction.

Thus, at any given moment, numbers of facilitators are involved.

  • The one who wishes to make the transaction.
  • Banking correspondent or the medium through which you wish to make the transaction (shopkeeper/ merchants).
  • The Aadhaar linked bank.
  • UIDAI. For authenticating fingerprint.
  • And finally NCPI, for settlement of transactions.

How to Use AEPS?

AEPS is very simple and easy to use. You need to follow few simple steps to get your transaction done.

  • Visit the nearest banking correspondent in your locality. You can visit any nearby banking correspondent regardless of whether you hold an account in that bank.
  • In the POS machine, enter your 12 digit Aadhaar number.
  • Select the type of transaction you wish to make. You can opt to withdraw or deposit cash, check your balance, pay for a purchase or service, or to get a mini statement of your transaction. You have to select the type of transaction after you enter your 12 digit Aadhaar number.
  • The next step requires you to select the bank in which you maintain your account. For example, if your Aadhaar linked bank account is Axis bank, the select axis bank from the list of banks. (Note: if you have multiple accounts linked to your Aadhaar, only the primary account can be used through AEPS).
  • In case of deposit or withdrawal, enter the exact amount to complete the transaction.
  • To complete the transaction you would require authenticating using your fingerprint.
  • Once authenticated, the transaction is completed instantly and a receipt is generated which will be handed to you.
  • Your bank will also notify you by sending a SMS on your registered number.

FAQ's on Aadhaar Enabled Payment System (AEPS)

Can we withdraw money using Aadhaar Card?

Aadhaar enables you to withdraw money through Aadhaar enabled payment system by just using your 12 digit Aadhaar number and your fingerprint.

How does Micro ATM work?

Micro ATMs are mediums through which banks core system are connected and are accessed by using your fingerprint and Aadhaar number.

Is NPCI a government company?

NPCI stands for national payments corporation of India, a not for profit entity. It is however not a government organization.

What is Aadhaar based payment system?

It enables you to access basic financial services with your Aadhaar number.

What is Aadhaar mapping?

Aadhaar mapping is seeding to NPCI.

What is Aadhaar NPCI?

Linking of Aadhaar number to NPCI to facilitate payment through your Aadhaar number.

What is APBS credit?

APBS is used for credit transactions for government and government agency disbursements.

What is APBS IOC?

IOC stands for immediate or cancel order. It is a financial term used for a transaction.

What is Bharat bill payment system?

Bharat Bill Payment System is a one stop online platform for bill payments.

What is DBT and AEPS transaction?

DBT and AEPS transaction is service developed to facilitate direct benefit transfer to consumers like LPG subsidies.

What is IIN in AEPS?

IIN stands for issuer identification number. It is six digit number which is allotted to the bank upon an application to NPCI from the bank seeking AEPS.

What is micro ATM machine?

Micro ATM Machine is a card swipe machine that has a finger print scanner.

What is Aadhaar payment bridge system?

The Aadhaar payment bridge system is a unique payment system implemented by the NPCI which uses the Aadhaar number as a central key for availing government benefits like subsidies.

What is cashless India?

Cashless India is an initiative introduced and pushed forward by the RBI to make banking and its services truly digital.

What is the full form of APBS?

The full form of APBS is Aadhaar payment bridge system.