AEPS - Aadhaar Enabled Payment System

Developed National Payment Corporation of India, AEPS or Aadhaar Enabled Payment System is a system that enables to carry out transactions through Aadhaar based authentication. It helps all individuals carry out financial transactions on a Micro-ATM and helps in empowering all sections of the society by making financial and banking services available through Aadhaar.

Uses of AEPS

The basic transactions that can be done through AEPS registration are:

  • Cash deposit
  • Cash withdrawal
  • Intrabank or Interbank fund transfer
  • Balance enquiry
  • Obtain a mini statement
  • Purchasing at fair shops

Benefits of AEPS

The Aadhaar Enabled Payment System enables the underbanked sections of the society to enable financial and basic services at ease. The benefits associated with AEPS are:

  1. The account holder can do both, financial and non-financial transactions with the help of an banking correspondent.
  2. There is no requirement of a signature on your debit card.
  3. It is a completely safe and secure process as AEPS transactions require the account holder’s fingerprint.
  4. It increases the reach to rural areas as banking executives can now reach distant rural places with micro POS machines.
  5. The process is easy-to-use for individuals who are not tech-savvy.
  6. It brings different sections of the society under a financial umbrella.
  7. AEPS helps in facilitating disbursements of different government schemes such as NREGA, Social Security pension, Handicapped Old Age Pension etc using Aadhaar authentication.

Requirements for AEPS transactions

Although Aadhaar Enabled Payment System does not require any paper or card, it does require the individual to link the Aadhaar to a bank account. If the individual fails to link his/her Aadhaar, the AEPS facility is not useful for you.

The major requirements to carry out an AEPS transactions are:

  • Aadhaar Number
  • Fingerprint
  • Name or Bank IIN(Issuer Identification Number)

This means all you need to carry out an AEPS transaction is to remember your Aadhaar number just like your own mobile number.

Why Aadhaar for Authentication?

When Aadhaar was launched in India, all individuals were asked to provide their biometric data which includes your fingerprints and iris image. The biometric data collected is unique to every individual and thus cannot be duplioated.

This is why Aadhaar is used for authentication as your Aadhaar number is unique and therefore acts as a proof for the banking transactions. In fact, nowadays, Aadhaar has now replaced signatures and physical document submission process.

How to use AEPS?

The steps to AEPS registration are as follows:

  • Step 1: Visit a banking correspondent in your nearest area. It is not necessary that he/she is a correspondent from your bank.
  • Step 2: Enter your 12-digit Unique Identity Number mentioned in your Aadhaar in the POS machine.
  • Step 3: Select the type of transaction- Cash deposit, Cash withdrawal, Intrabank or Interbank fund transfer, Balance enquiry, Obtain a mini statement
  • Step 4: Choose the bank name.
  • Step 5: Enter the transaction amount.
  • Step 6: Validate the transaction using your biometric(fingerprint or iris scan).
  • Step 7: As the transaction is completed in seconds, collect the receipt given.

Charges for AEPS transactions

The transactions with AEPS are comparatively costly over UPI. In fact, an AEPS transaction can go upto ₹15 per transaction. The r transaction cost is split amongst the following:

UIDAI may charge a nominal fee, which may is not charging anything till now.

NPCI may charge 15 paise to 25 paise for settlement.

THe bank may charge upto 1% of the transaction. The minimum charges are ₹5 and the maximum could go upto₹15.

Although, as of now, the Union government is bearing the cost of AEPS payment till December 2019. It is subsidising debit card, UPI and AEPS MDR charges. So, the transactions through AEPS is currently free of cost.

Transfer Limit for AEPS

There is no set limit for transactions made through AEPS. However, certain banks have capped the transaction limit to avoid misuse of this system. Various banks have set a daily limit of ₹50,000 on total transactions.

The Reason Behind AEPS

The government has decided to bring all the unbanked sections of the society in the banking framework. However, this is not geographically possible for people who live in distant and remote places. In order to provide them access to banking facilities, the government has come up with AEPS where people can easily send/receive money and avail banking and non-banking facilities with the help of micro-ATMS and banking executives.

Moreover, transactions done via fingerprint or iris detection makes the process completely safe and secure. This has also eliminated the hassle of carrying bank passbooks and debit card as the transaction can be done with only the Aadhaar number and your fingerprints.

FAQs

Q. What is Aadhaar Enabled Payment System?

A. AEPS or Aadhaar Enabled Payment System is a system that allows to carry basic banking and non-banking transactions with ease. These transactions are carried out only with the Aadhaar number and fingerprint scan or iris detection.

Q. What are the services available under AePS?

A. The services available under AEPS transactions are:
  • Cash deposit
  • Cash withdrawal
  • Intrabank or Interbank fund transfer
  • Balance enquiry
  • Obtain a mini statement
  • Purchasing at fair shops

Q. What are the benefits of AePS?

A. One of the major benefits offered by AEPS is the elimination of papers or card to carry out any transactions. The other benefits are:
  • Safe and secure
  • Easy to understand for individuals who are not tech-savvy.
  • Helps in facilitating disbursements of different government schemes
  • Increases the banking reach to rural areas

Q. Who can use AEPS?

A. Any resident of India having a valid Aadhaar card can avail the benefits of AEPS.

Q. How can a user enable this service ?

A. For AEPS registration, the individual first needs to link his/her Aadhaar number to bank account. Then, the individual must inform the bank about your interest in using the facility.

Q. What is an IIN?

A. An IIN or Issuer Identification Number is a 6-digit number that helps in the identification process of your bank. These identify the card issuing institution that issued the card to the card holder.

Q. What type of bank account do you need to have for AEPS?

A. A bank account linked with Aadhaar is required for AEPS.

Q. Is it possible to link more than one bank account to your Aadhaar card?

A. Is it possible to link more than one bank account to your Aadhaar card?

Q. Should the payee/beneficiary also have AEPS to receive funds?

A. It is not necessary for the payee/beneficiary to have AEPS to receive funds.