Aadhaar Enabled Payment System (AEPS)

Introduction

The Aadhaar Enabled Payment System (AePS) is a digital payment solution developed by the National Payment Corporation of India (NPCI). This innovative system utilizes Aadhaar-based authentication to facilitate seamless financial transactions, empowering users with easy access to banking services. AePS leverages the Unique Identification Number (Aadhaar) to streamline transactions and expand the reach of banking services across diverse demographics.

Services Offered by Aadhaar Enabled Payment System

The Aadhaar Enabled Payment System (AePS) allows individuals to carry out basic banking transactions using their Aadhaar Card number and biometric authentication. Here are the key services offered:

1. Cash Withdrawal

Customers can withdraw cash from their bank accounts using AePS by authenticating with their Aadhaar number and fingerprint. This makes it easier for individuals without traditional banking access to get cash in rural and semi-urban areas.

2. Cash Deposit

AePS enables users to deposit money into their bank accounts. The process is simple: visit an AePS-enabled banking point, authenticate using Aadhaar, and deposit the cash. This ensures hassle-free deposits even without a regular bank branch nearby.

3. Balance Enquiry

Individuals can easily check their account balance by visiting an AePS-enabled service point. With the Aadhaar number and biometric verification, users can access their account details and check the balance without needing to visit a bank.

4. Mini Statement

AePS provides the facility to access a mini statement, which shows the last few transactions in the account. This service helps users keep track of their transactions without relying on printed bank statements.

5. Fund Transfer

The AePS system allows for interbank fund transfers between Aadhaar-linked accounts. From interbank fund transfers to Aadhaar fund transfer, users can send money from their account to another Aadhaar-linked account seamlessly, making it a useful feature for quick transfers.

6. Aadhaar to Aadhaar Transactions

AePS enables direct Aadhaar-to-Aadhaar transfers, allowing funds to move from one Aadhaar-linked account to another without requiring bank account details, ensuring quick and easy transactions.

7. Micro-ATM Services

AePS enables micro-ATM functionality, allowing banking correspondents to offer services like withdrawals, deposits, and transfers in rural and remote areas. This brings banking services closer to people who may not have access to regular ATMs or banks.

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Additional Services Offered by AePS

AePS also includes the following services:

• eKYC: Electronic Know Your Customer process for quick and efficient identity verification.
• Tokenization: Security feature for protecting sensitive data.
• Aadhaar Seeding Status: Allows users to check the status of Aadhaar seeding with their bank account.

How to Use Aadhaar Enabled Payment System?

AePS is simple and user-friendly, especially designed for those with limited access to traditional banking. Here’s how to use the system:

1. Visit an AePS-enabled Banking Point

To use AePS, go to any banking point or micro-ATM that supports AePS services. Banks, post offices, or business correspondents generally set up these points to facilitate rural banking.

2. Provide Aadhaar Number

Share your 12-digit Aadhaar number with the operator at the AePS service point. Ensure that you link your Aadhaar to your bank account to avail the services.

3. Select the Required Service

Inform the operator of the specific service you wish to avail, such as cash withdrawal, deposit, balance enquiry, or fund transfer. The operator will then proceed with the requested transaction.

4. Authenticate Using Biometric Verification

For security, AePS requires Aadhaar biometric authentication. Place your finger on the biometric scanner, and the system will verify your identity using your Aadhaar-linked fingerprint data.

5. Complete the Transaction

After successful authentication, the system processes the transaction. For cash withdrawals or deposits, the operator or you will receive the amount. For balance inquiries and mini statements, the information displays immediately, and for fund transfers, the funds transfer instantly.

AePS offers a simple and effective way to access banking services, especially for those who may not have regular banking access, thereby promoting financial inclusion across the country.

Channels for Conducting Transactions via Aadhaar Enabled Payment System (AePS)

AePS simplifies online transactions through various authorized channels, enhancing accessibility for underserved communities:

1. Transactions via Bank’s Business Correspondent

Business Correspondents (BCs) are authorized representatives appointed by banks to act on their behalf. They carry Micro ATM devices that enable customers to conduct transactions such as cash deposits, withdrawals, and balance enquiries, even in areas without a physical bank branch.

2. ‘BHIM Aadhaar Pay’ at Merchant Locations

This service allows merchants to accept payments directly through the AePS system. Customers can make purchases by simply providing their Aadhaar number or Aadhaar Virtual ID (VID) and authenticating the transaction with their biometric data, making the process seamless and cashless.

AePS Cash Withdrawal Process

For AePS cash withdrawals:

• The AePS machine functions similarly to a Point of Sale (POS) terminal.
• Instead of a debit/credit card PIN, the retailer will enter the customer’s Aadhaar number.
• Biometric authentication (fingerprint or iris scan) is required to validate the transaction.

Required Information for AePS Transactions:

• Aadhaar number
• Biometric data

AePS Charges

AePS transactions are generally more expensive compared to UPI transactions. The cost for an AePS transaction can be up to ₹15 per transaction. This fee structure may vary based on the service provider and transaction type.

AePS Transaction Limits

• Daily Transaction Limit: Many banks impose a daily limit of INR 50,000 to prevent misuse and fraudulent activities.
• Withdrawal Limit: The maximum withdrawal limit set by NPCI for AePS cash withdrawals is ₹10,000.

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Things to Consider During AePS Cash Withdrawal

Before using AePS for cash withdrawals, consider the following:

• No OTP or PIN is required to complete any transactions using this new technique.
• If you want to use this service, your bank account must be connected to your Aadhaar.
• If you have numerous accounts at a bank, the main account will be utilized solely under the AePS system.
• The Aadhaar Enabled Payment System only enables transactions between 
• To use this service, you must link several bank accounts to Aadhaar. However, you will only be allowed to use one account per bank to use the service.
• Every day, the transaction cut-off time for AePS transactions is 11 p.m. IST. And any transactions completed before the day’s cut-off time are included in the day’s settlement.

Conclusion

AePS is a transformative payment system that leverages Aadhaar for secure and efficient financial transactions. By providing a range of services including cash withdrawals, deposits, and balance inquiries, AePS enhances financial accessibility across various segments of society. Its user-friendly approach and integration with biometric authentication make it a valuable tool for individuals seeking convenient banking solutions.