AEPS stands for Aadhaar Enabled Payment System. AEPS is a payment service based on the Unique Aadhaar Number, which allows Aadhaar card holders to make financial transactions seamlessly using Aadhaar-based authentication.
The AEPS system seeks to empower all sections of society by making financial and banking services available to everyone via Aadhaar. AEPS allows you to transfer funds, make payments, and withdrawals, deposit cash, check your bank balance, and so on.
Under AEPS, payments can be made using the Aadhaar number and by providing Aadhaar verification at point of sale (PoS) machines or micro ATMs. This is a straightforward, safe, user-friendly payment platform for financial transactions. To use AEPS, it is mandatory to link your bank account with your Aadhaar.
AEPs is an initiative of the National Payments Corporation of India (NPCI) to promote the new cashless economy initiative by the government. It also aids the financial inclusion of underbanked societies of the country.
What Services are Offered by AEPS?
AEPS offers the following banking services:
- BHIM Aadhaar Pay
- Cash Withdrawal
- Cash Deposit
- Mini Statement
- Balance Enquiry
- Authentication
- Aadhaar to Aadhaar Fund Transfer
AEPS also offers a few other services like the following:
- eKYC
- Tokenization
- Aadhaar Seeding Status
How does AEPS work?
AEPS works like a PoS machine. The merchant or Business correspondent enters the customer’s Aadhaar Number (which is linked to a specific bank account). The transaction is authenticated using the customer’s biometric details. A 6-digit Bank Issuer Identification Number is required to complete the transaction.
- Visit a micro ATM or a Business correspondent
- Provide Aadhaar and bank name
- Select the transaction required
- Verification of Aadhaar is conducted through fingerprint/Iris Scan
- Once the transaction is completed, a receipt is generated.
Benefits of AEPS and the Objectives of AEPS:
- To enable people to use their Aadhaar to access an Aadhaar-enabled bank account and perform basic banking functions like cash withdrawal, cash deposit, interbank or intrabank fund transfer, balance enquiry, and a mini statement via a Business Correspondent.
- To support the Government of India’s (GoI) and Reserve Bank of India’s (RBI) goal of increasing financial inclusion.
- To support the RBI’s goal of electronic retail payments.
- To facilitate the disbursement of government entitlements such as NREGA, Social Security pension, Handicapped Old Age Pension, and so on, from any Central or State Government body, using Aadhaar and authentication as supported by UIDAI.
- To enable safe and secure interbank operations.
- To lay the groundwork for a comprehensive suite of Aadhaar-enabled banking services.
Related Post: IMPS – Immediate Payment Service
FAQs
- What is AEPS?
AEPS, expanded as Aadhaar Enabled Payment System, is a payment method that allows you to make payments and perform a few banking transactions with your Aadhaar number.
- Who can use AEPS?
All Indian residents having a valid Aadhaar card linked to a bank account can use the AEPS service.
- How can a user enable AEPS service?
To begin using AEPS, you must first link your bank account to your Aadhaar number. Then, contact your bank and inform them that you intend to begin using AEPS.
- Should the payee also have AEPS to receive funds?
No, it is optional for the payee to activate AEPS.
- Can you link more than one bank account to your Aadhaar card?
Yes, you can link more than one bank account to your Aadhaar card
- Who is a business correspondent?
A business correspondent is simply an authorised bank agent who provides banks with terminal or micro ATM services.
