Aadhaar Enabled Payment System or better known as AEPS, developed by the umbrella body for digital transactions NPCI- National Payment Corporation of India, is a kind of a payment system that allows to carry out financial transactions by way of Aadhaar based verification. AEPS is based on the Unique Identification Number or the Aadhaar number and permits the Aadhaar cardholders to initiate and complete the transactions effortlessly. It is a way to empower all segments of the society by making banking and financial service areas accessible to everyone through Aadhaar.
Scope of AEPS
AEPS is nothing but an Aadhaar-enabled payment system with the help of which you can perform many basic banking transactions like making several payments, interbank or Intrabank money transfer, making withdrawals, depositing cash, enquiring about your bank balance, etc. AEPS Is a simple, safe and user-friendly platform for all your financial transactions. AEPS permits clientele to make payments using their Aadhaar and by providing Aadhaar authentication at the point of Sale or PoS or micro ATMs. This is another initiative taken by the National Payments Corporation of India (NPCI) to encourage cashless transactions in India. You can do all transactions through a Business Correspondent or BC or any bank agent by means of a micro ATM. And except for fund transfer, wherein you would be required to go to a precise bank BC, for several other transactions you may use any bank BC. AEPS has been formed to speed track the Financial Inclusion in the country thereby
Let us understand briefly what an Aadhaar is.
What is an Aadhaar?
An Aadhaar is a 12-digit unique number issued by the UIDAI- Unique Identification Authority of India to the Indian residents. Any person, irrespective of age and gender may voluntarily enroll to have his or her Aadhaar number. The Individual has to give his or her demographic and biometric information at the time of the enrollment process and does not have to pay any charge for the same. Aadhaar Enrolment is done only once and is valid for the entire life. And with this unique card, you will not only be able to get many benefits but can use the same for other financial transactions as well, which are required in our daily lives.
Here, we will talk more about aadhaar enabled payment systems and various aspects of AEPS in detail.
Uses of AEPS
AEPS is a bank-controlled model that allows online interoperable financial inclusion transactions at Point of Sale-PoS or Micro ATM through the bank’s Business correspondent utilizing the Aadhaar authentication. AEPS permits mainly 6 types of basic financial transactions that can be performed through AEPS registration and they are listed as below:
Benefits of AEPS
AEPS aims is to build a strong foundation for a whole variety of Aadhaar empowered Banking services with several benefits and they can be summarized as below:
Requirements for AEPS transactions:
Even though Aadhaar Enabled Payment System does not need any document nor any card, it does require you to link your Aadhaar to your bank account. If you do not link your Aadhaar, you will not be able to enjoy the AEPS facility.
The main requirements of an AEPS transaction to perform successfully are:
In simple language, it means that for you to carry out an AEPS transaction, have your Aadhaar number with you and the rest of the process can be done smoothly.
How to use Aadhaar Enabled Payment System?
You need to follow the below steps to do an AEPS registration:
Charges for AEPS
AEPS transaction cost is nil for you as a customer and you need not pay anything to avail of this service. The Merchant or Banking Correspondent may be charged or paid upon the bank ‘s decision. The transaction cost is divided between the following sections:
Transfer limit of AEPS
There is a standard limit that is set by RBI for transactions made through AEPS, although banks have the liberty to define a limit for all these transactions. Few banks have set the limit of the transaction to evade misuse or misappropriation of this system. Many banks have set up a daily limit of INR 50,000 on the total transactions done by anyone, however, it may vary from bank to bank as mentioned.
Reason behind AEPS
Indian Government has taken the initiative “Cashless India” and thereby decided to bring together all the unbanked segments of the society under the banking umbrella. This is not possible geographically for individuals living in distant and far-off places. And this is the exact reason why the government has come up with this facility to provide them entry to the banking amenities, where individuals can effortlessly send or obtain funds and take the benefits of banking as well as non-banking facilities with the support of micro-ATMs and banking officials. Furthermore, transactions done through fingerprint or iris recognition makes the procedure secure. The process of AEPS has also abolished the hassle of having a physical bank passbook and debit card as these transactions can be performed with your Aadhaar number only and your fingerprints.
Important points to remember in AEPS
You must remember the below points before you start using AEPS:
Given the larger benefits and uses of AEPS, you must start to take the maximum advantage o this system and help the government in their initiative to make India cashless.
You can have any type of bank account but the same has to be linked with Aadhaar for using AEPS.
Yes, you can. It is possible to link one or more bank accounts with your Aadhaar card.
No, it is not essential for the payee or the beneficiary to have the facility of AEPS to get funds.
An IIN or Issuer Identification Number is a 6-digit number that supports the identification procedure of your bank. These identify the institution that issued the card to the respective cardholder.