Guide to Aadhaar-Enabled Payment System (AEPS)
Due to a large population and distant places, the government’s vision to include all the sections of society in the banking framework was quite challenging to achieve. Also, banking activities were not easily accessible in remote areas. With this vision and also to promote digitalization, the government came up with the launch of the Aadhaar Enabled Payment System(AEPS).
Aadhaar Enabled Payment System (AEPS) is a payment mechanism allowing bank customers to carry out banking transactions using their Aadhaar card.
This payment model was created by the National Payments Corporation of India (NPCI). The initiative authorizes the customers to perform their banking transactions like cash withdrawals, balance enquiry, statement checks etc., using the Aadhaar card as their identity.
The model allows customers who have linked their bank account with their Aadhaar card to conduct financial transactions by visiting a local Banks’s Business Correspondent(BC) and making a transaction at the point of Points of Sale(POS) or micro ATMs. It proves to be the safest way to transact as the transaction would be completed only when the customer submits their Aadhaar card number and biometric details.
Features of AEPs
- AEPS is a mechanism which empowers bank customers to use their Aadhaar card details to conduct business transactions.
- AEPS’s objective is to support the RBI’s vision of financial inclusion.
- It strengthens the government’s goal of digitalization.
- It is a safe and secure way of conducting financial transactions as it requires the user’s biometric details.
- AEPS conducts the transaction in the same way as a debit card/credit card does.
- It performs transactions such as inter-bank and intra-bank fund transfers, cash deposits and withdrawals, balance checks etc.
- AEPS transactions can be carried out using an Aadhaar number; hence, bank account numbers need not be remembered.
Benefits of AEPs
- Easy Accessibility- AEPS works with the help of the Bank’s Business Correspondent and micro ATMs. Banking Correspondent is also accessible anywhere, even in rural areas, and micro ATMs are handy to use so that they can go anywhere. This way, the Aadhaar Enabled Payment System is easily accessible by anyone anywhere.
- Free from fraud- The system is entirely safe as it will not let the transaction happen without submitting the biometric details of the Aadhaar card holder. The UIDAI authenticates the fingerprint and therefore it is free from any fraud.
- Speedy transactions- AEPS is a quick payment mechanism. It exempts bank customers from the hassle of performing financial transactions by visiting banks and standing in a queue. AEPS lets the transaction happen within a few seconds.
- Replaces signature- AEPS uses Aadhaar as authentication. It means the biometric details linked to the Aadhaar card need to be provided to complete a transaction. Hence, it replaces the need for a signature.
- Empowers the use of Aadhaar- AEPS system works with an Aadhaar number; hence, it empowers people to use their Aadhaar to perform business transactions. Hence, supporting the government’s aim of digitalization.
Requirements for AEPS
To perform a transaction using the AEPS method, the following will be required-
- Aadhaar Card
- Bank Account
- Aadhar and Bank accounts should be linked.
- Fingerprint/Biometric details.
- IIN (Issuer Identification Number): This is a unique 6-digit number issued by NPCI to each bank. A bank that wishes to participate in AEPS needs to get IIN issued, and after that, they can conduct a transaction. There is only one IIN for a bank, irrespective of the branch. Such as the IIN for the SBI is 607094
- Bank’s Business Correspondent
- MICRO ATMs
Services offered by AEPs
Aadhaar Enabled Payment System allows bank customers to use their Aadhaar number to carry out banking transactions through a business correspondent via micro ATMs. It facilitates the customers to avail of the following services-
- Cash Deposit
- Cash withdrawal
- Mini Statement
- Balance Check
- Aadhaar to Aadhaar Fund Transfer
- BHIM Aadhaar Pay
Steps to use AEPS
Step 1- Visit a local business correspondent- A business correspondent are the agents/entities engaged by banks to provide banking transactions at locations other than bank branches/ATMs.
Step 2- Enter the Aadhaar card number in the Micro ATM or POS machine- Micro ATM is a mini version of an ATM. It is handy and serves as a Point of Sale machine to conduct a transaction from anywhere.
Step 3- Enter the bank name or IIN(Issuer Identification Number) of the bank.
Step 4- Select the type of transaction to carry out.
Step 5- Enter the amount of the transaction.
Step 6- Finally, undergo the verification process by providing the biometric details.
Step 7- The payment will be completed, and the transaction receipt will be issued.
Aadhaar Enabled Payment System promotes digitalization by permitting bank customers to use their Aadhaar details to run some of their banking transactions. This system requires a person’s bank account to be linked to their Aadhaar card to perform banking transactions such as cash withdrawals and deposits, fund transfers, balance checks, etc. It is a simple procedure that can be carried out just by entering the Aadhaar number and the bank’s name, and IIN. It is secure in a way as it desires the biometric details of the person carrying out the transaction. AEPS is a mechanism which is easily accessible by anyone and anywhere through a business correspondent via a mini ATM.
Frequently Asked Questions (FAQs)
- Which transactions can be conducted using AEPS?
Banking transactions such as cash deposits, cash withdrawals, enquiry about balance, checking bank statements, fund transfers etc., can be carried out using AEPS.
- What are the basic requirements for customers to use AEPS?
A customer will require an Aadhaar number and a bank account linked to an Aadhaar card, Bank name or IIN of bank and biometric details to use AEPS to perform a transaction.
- Who are Business Correspondents?
Business correspondents are the agents/entities engaged by banks to provide banking transactions at locations other than bank branches/ATMs. They must have a micro ATM to perform a banking transaction using AEPS.
- Who can use AEPS? Is it safe?
All Indian residents with an Aadhaar card and a bank account linked to their Aadhaar card can use the AEPS method to carry out basic banking activities. It is safe and secure as it uses biometrics and fingerprint scan to complete a transaction.
- Is there a transfer limit of AEPS per day?
No, AEPS does not have a limit for making transactions. However, some banks have set their limits. NPCI has set a maximum transaction amount of ₹ 10,000 on a single AEPS financial transaction.