Aadhaar Enabled Payment System (AEPS), created by the umbrella organization for digital transactions NPCI-National Payment Corporation of India, is a type of payment system that allows financial transactions to be carried out using Aadhaar-based authentication. AEPS is based on the Unique Identification Number or Aadhaar number and allows Aadhaar cardholders to easily begin and finish transactions. It is a method of empowering all sectors of society by making banking and financial services available to everybody through Aadhaar.
Objectives of Aadhaar Enabled Payment System
AePS, a bank-led model, seeks to achieve the following goals:
- The Aeps system enables customers to access Aadhaar-linked bank accounts to do operations like depositing cash, withdrawing money, intrabank or interbank fund transfer, balance inquiry, and obtaining a mini statement.
- It contributes to the Government of India’s and the Reserve Bank of India’s objective of increasing financial inclusion and promoting payment electrification.
- It also makes it easier to disburse cash under different government schemes like NREGA, Social Security pension, Handicapped Old Age Pension, and so on.
- Finally, it attempts to lay a solid framework for Aadhaar-based banking services.
How to Use Aadhaar Payment System
Step 1: Go to a mini ATM or a banking representative.
Step 2: Enter your Aadhaar number and the name of your bank.
Step 3: Determine the type of transaction you wish to do.
Step 4: Verify your identity with a fingerprint or an iris scan.
Step 5: Retrieve your receipt.
How Does Aadhaar Cash Work
The AEPS machine functions similarly to a POS machine. Instead of a debit/credit card pin, the retailer must enter the client’s Aadhaar number and validate the transaction using biometric data from the consumer.
To carry out an AEPS transaction, you will need the following formation:
- IIN or Bank’s Issuer Identification Number
- Aadhaar No.
- Fingerprint or Bio metrics
- Micro ATM
- Assisted Mode
Aadhaar Enabled Payment System Charges
AEPS transaction costs are nil for you as a client, and you are not required to pay anything to use this service. Depending on the bank’s decision, the Merchant or Banking Correspondent may be charged or compensated. The transaction cost is split into the following categories:
- The UIDAI charges a very little cost.
- The settlement fee charged by NPCI ranges from 15 to 25 paise.
- Banks may charge up to 1% of the total transaction value. The minimum and maximum costs are INR 5 and INR 15, respectively.
Transfer Limit of AEPS
The RBI establishes a standard limit for AEPS transactions, although banks are free to set their own limits for all of these transactions. Few banks have established transaction limits to avoid misuse or theft of this technology. Many banks have imposed a daily restriction of INR 50,000 on total transactions made by everyone; however, as previously stated, this limit may vary from bank to bank.
Considerations in AEPS
Before you begin utilizing AEPS, keep the following considerations in mind:
- 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 Aadhaar-linked bank accounts, not transactions between unlinked accounts.
- 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.
Launch of AePS
The government has set a goal of integrating all residents into the financial system. However, opening bank offices in all distant communities is not possible. As a result, the government has developed AePS, which allows individuals in remote areas to effortlessly send/receive money and access other financial and non-financial banking services through the use of Micro ATMs and banking correspondents.
Transactions made over this channel need biometric identification through the best finger/iris detection available. Signatures may be faked, but fingerprints and iris scans cannot. This has made transactions more secure. People will no longer need to carry their bank’s passbook or debit card for cash transfers because just your Aadhaar number and fingerprints will be necessary to complete the transactions, making it simple for everyone to utilize this service.
Aadhaar AEPS – FAQs
Q1. How does a user activate this service?
To begin utilizing AEPS, you must first link your bank account to your Aadhaar number. Then, call your bank and inform them that you intend to begin utilizing AEPS.
Q2. What exactly is AEPS?
AEPS, which stands for Aadhaar Enabled Payment System, is a sort of payment mechanism. The National Payments Corporation of India provides the service (NPCI).
Q3. Who is eligible to utilize AEPS?
This payment option is available to all Indian citizens who have a valid Aadhaar card and a bank account.
Q4. What is the definition of a business correspondent?
A business correspondent is just an authorized bank representative who provides banks with terminal or mini ATM services.
Q5. What exactly is an IIN?
This is a six-digit number that aids in the identification of your bank.