Aeps: A Complete guide on the future of Finance

  • 2023-10-16 14:47:42

Aadhaar enabled payment system or the AePS is a bank-led payment model that allows all Aadhaar card holders to make monetary transactions at micro automated teller machines (ATMs)or point of sale (POS) using a unique identification number (UID).

What is AePS(Aadhar Enabled Payment System)?

By enabling Aadhaar-originated interbank transactions through centralised switching and clearing organisations, the Reserve Bank of India (RBI) and the Government of India hope to enable people to carry out banking and financial services like fund transfers, cash withdrawals, mini statements, balance inquiries, etc. through a Aeps Service Provider.


AePS(Aadhar Enabled Payment System) is used by any State or Central government organisations employing Aadhaar to streamline payments for government programs like social security pension, disabled old age pension, National Rural Employment Guarantee Act (NREGA), etc.


Services Provided by Aeps(Aadhar Enabled Payment System) :-  

Banking Services

  • Aadhaar to Aadhaar Fund Transfer
  • Cash Withdrawal
  • BHIM Aadhaar Pay
  • Authentication
  • Cash Deposit
  • Balance Enquiry
  • Mini Statement

Other Services

  • Aadhaar Seeding Status
  • Best finger detection
  • Demo Authorization
  • Tokenization
  • Electronic Know Your Customer or eKYC


How to Use AePS(Aadhar Enabled Payment System) ?

AePS was created by the National Payments Corporation of India (NPCI) to serve a variety of goals aimed at people or organisations involved in the banking and financial system. The following can make use of AePS software:


AePS helps the government and regulators achieve their objective of promoting fintech services  inclusion throughout India. to begin exploring alternate lifestyle options like being a business correspondent. Additionally, they want to eliminate cash from retail transactions by using BHIM Aadhaar Pay to create an acceptance framework and go cashless.


  • Banks: With a quick and simple KYC procedure, AePS provides seamless interoperability across banks. It saves money and enables the bank to serve consumers in far-flung locations without bank offices.
  • Individuals: AePS has made it simpler for them to do all fintech operations without having to go to a branch, worry about carrying cards, or remember pins and passwords by bringing banking to every individual's home. 
  • Merchants: AePS allows fintech app development companies to make digital payments inclusively and beneficially.

The AePS model is created to smoothly handle both intra- and inter-bank transactions by enabling a verification gateway for all Aadhaar-linked account holders.


Benefits Of using AePS(Aadhar Enabled Payment System):

  • A safe and secure form of payment.
  • Interoperable with different banks.
  • promotes financial inclusion and assists disadvantaged societal groups.
  • All bank account holders would have access to their accounts through AEPS(Aadhar Enabled Payment System) using Aadhaar authentication.
  • Aadhaar number and biometric data are the only pieces of information needed for AEPS to start a transaction.
  • The use of Aadhaar authentication by AEPS enables the payment of government benefits like NREGA, Social Security pensions, Handicapped Old Age Pensions, etc. by any Central or State Government entities.

Reasons for Using AePS(Aadhar Enabled Payment System)?

To start a transaction using AePS, a bank holder merely needs to provide their Aadhaar number and biometric data. It enables the acceptance of the consumer's Aadhaar number, Virtual ID, and biometrics for the purchase of products and services, as well as the facilitation of transactions through Aadhaar-based biometric verification.


Key justifications for choosing AePS include:

  • Easy to use.
  • System for secure and safe payments.
  • Interoperability across different banks.

Steps to use AePS:

  • Go to any banking correspondent or a micro ATM.
  • Give your bank details and Aadhaar number.
  • Select the type of transaction you are willing to make.
  • Provide verification through biometrics.
  • Collect your transaction receipt.

 To use the AePS services, there are only a few minimal prerequisites for Aadhaar authentication. Face, fingerprint, and IRIS matching are all examples of biometric identification. Along with a OTP function, demographic matching. The Aadhaar card and bank account must be linked for the AePS services to operate efficiently and successfully.

Future Of AEPS(Aadhar Enabled Payment System):

AEPS in India has a highly promising future. AEPS usage in India is anticipated to considerably rise as more individuals become aware of its advantages. Several Indian banks have already implemented AEPS, and as more banks begin to provide AEPS services to their customers, this trend is anticipated to continue. The capacity of AEPS to provide fintech services in rural and distant places is one of its main benefits. AEPS can offer financial services to millions of people who previously had restricted access to banking infrastructure by utilising the Aadhaar card. By boosting financial inclusion, this would not only serve to lessen the financial exclusion of those in these regions but also contribute to economic growth.Additionally, the Aadhaar Enabled Payment Service would promote the acceptance of digital payments in India, realising the vision of Digital India. AEPS will be essential in enabling consumers to make digital payments using their Aadhaar cards as the Indian government pushes for the use of digital payments. This will facilitate a decrease in the reliance on cash transactions in India. The future of AEPS services in India appears to be quite bright. AEPS has the potential to transform India's financial environment by enabling the adoption of digital payments and delivering banking services to remote and Rural regions.


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