The AEPS is an Aadhaar enabled payment system through which you can make payments, transfer funds, deposit cash, check account balance, etc. It allows Aadhaar card holders to make financial transactions in a secure and effortless manner.
UIDAI, the issuing authority of Aadhar card, offers several facilities to the government to carry out service delivery system efficiently. The Aadhaar Enabled Payment System (AEPS) is one such system through which you can transfer, withdraw and deposit money from your bank accounts with the help of Aadhaar biometric authentication. To do so, you will first have to link your bank accounts with Aadhaar number to avail this facility.
The AEPS facility was launched in April 2018 by PM Narendra Modi, in order to fast track banking facilities in the country. However, there was confusion around the future of AEPS after the Supreme Court verdict, which scrapped the mandatory linking of Aadhaar with bank accounts. Some banks had suspended AEPS operations following order of the Supreme Court. But, UIDAI has clarified that banks can carry on with AEPS for transactions including fund transfer, deposit, withdrawal, balance enquiry, etc. as the AEPS facility is the part of direct benefit transfer scheme.
What is AEPS?
Aadhaar Enabled Payment System is developed by NPCI (National Payment Corporation of India). The AEPS system allows easy access to the primary financial services through a micro ATM, which can be used by just entering your Aadhaar pin and fingerprint verification. The main objective of AEPS is to make payments less complicated, secure and faster. AEPS eliminates the use of cards to perform a transaction. You don’t need any document or signature to withdraw, deposit, or transfer money from your bank account.
The AEPS is not only fast, but it also provides security against malpractices otherwise associated with card payments. To perform a banking transaction, you would require to verify your fingerprint to complete the transaction. AEPS can be availed at any bank despite you maintaining an account with that bank.
How beneficial is AEPS?
With Aadhaar Enabled Payment System, you can withdraw and transfer money from your bank account, check balances, make cash deposits, pay money for your purchases and get a mini statement of your recent transactions.
AEPS can be used through micro ATMs: Micro ATMs are the machine to swipe cards which has fingerprint enabled scanners. Micro ATMs are handy and can be carried to remote locations by the banks.
Transactions can be performed without a debit card: Usually, you need a debit card to withdraw cash or to make a payment against a purchase. The need of debit card gets eliminated as AEPS allow you to perform a transaction with the help of your Aadhar card number and fingerprint.
Fast and secure: Aadhar card is a unique identity of an individual comprising of his/her biometric data i.e. fingerprint and iris. Thus, it reduces the chances of any fraud. On successful transaction, a receipt is generated, and your bank sends you an intimation through SMS service. The facility is fast and does not involve any complex procedure. People in the rural area are often overwhelmed when using ATMs, while AEPS makes it easier for everyone to perform banking transactions.
Boon for rural places: One of the objectives of AEPS is to include rural India in this digital drive. Banking in the rural area has not been implemented entirely. There are several regions in the country where there is no ATM facility. For such areas, micro ATMs and AEPS comes handy. Micro ATMs does not hold cash in the machine. The banking correspondence carries the cash, and instant cash facility can be availed through Aadhaar and fingerprint.
Shopkeepers can accept payments through AEPS: AEPS makes receiving payment as easy as making payments. Shopkeepers and merchants can use AEPS to receive payments. This enables people to make and accept payments faster.
How does AEPS work?
It is possible to avail basic banking facilities by using 12-digit Aadhaar provided by UIDAI. Your Aadhaar number is linked to your bank account and to authenticate AEPS transaction, you would require to use your fingerprint to validate the transaction. Once the UIDAI authenticates your fingerprint, your transaction can be completed by the bank. The payment system introduced by UIDAI is safe and secure. At any given moment, there are a number of facilitators involved in any transaction to assure complete safety of your transaction.
- The person who wishes to perform a transaction
- Banking correspondent/ merchant/ shopkeeper through which you want to you make the transaction.
- The Aadhaar linked bank
- UIDAI to authenticate your fingerprint
- NCPI to settle the transaction.
Types of Aadhaar AEPS
Aadhaar Enabled Payment facility provides fast and easy access to primary banking services such as cash deposit, cash withdrawal, making instant payments, checking account balance, and so on. The facility is enabled through micro ATMs, and all you need to have is your Aadhaar card number and fingerprint to avail these services.
Cash withdrawals: Micro ATMs do not hold cash. The banking correspondent carries the cash, and you can make transactions by simply providing your Aadhaar number and fingerprint.
Cash deposit: You can make cash deposits into your bank account by providing your Aadhaar number and fingerprint. Once the transaction is completed, the system will generate a receipt and your bank will notify you by sending an SMS.
Aadhaar to Aadhaar fund transfer: Aadhaar to Aadhaar fund transfer is generally used by shopkeepers and merchants to accept payments. AEPS easily transfers the payments from the buyer’s account to the seller's account.
Balance enquiry: You can check your account balance by simply visiting the nearest banking correspondent in your area. Again, all you need is your Aadhaar number and fingerprints.
The Aadhaar Enabled Payment System allows you to perform basic banking transactions without having a smartphone or debit card. AEPS is a boon especially, for people who live in remote villages. With the country moving towards being digital India, the dream to achieve this seems one step closer than before with the introduction AEPS.
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