AEPS or Aadhaar enabled payment system is an Aadhaar-based authentication model for financial transactions done on micro-ATMs/Point of Sale (PoS). UIDAI joined hands with different stakeholders such as the National Payments Corporation of India (NCPI) and Reserve Bank of India (RBI). The collaboration resulted in development of a platform for AEBA (Aadhaar Enabled Bank Account) holders from the marginalized sections of the society.
The platform allows the said AEBA holders to access banking and related facilities with Aadhaar authentication on Micro ATMs. To use this service, a user should have his/her bank account linked with the Aadhaar Number. As a customer, you can carry out the transactions either through a BC (Business Correspondent) or bank agent on a Micro ATM. But for fund transfer, you need to go to a BC of a bank.
The Government of India has introduced facilities to make financial transactions easier for merchants and business correspondents. For instance, the Reserve Bank of India with its two Working Groups focused on Micro ATM standards and the Central Infrastructure & Connectivity for Aadhaar based financial inclusion. Both the groups worked to make it possible to have Aadhaar Enabled Payment system for merchants. The transactions that can be done using AEPS are:
At the time of enrolment, the user has to provide his/her fingerprint, Aadhaar number, and IIN. An IIN is a 6-digit number that identifies the bank with which the customer is associated.
Below-given are steps for AEPS registration:
Here are a few important details about AEPS:
Out of the total charge for transactions, the UIDAI may charge only a nominal fee or nothing at all. NCPI may charge anywhere between 15 paise and 25 paise, whereas the bank may charge up to 1% of the transaction.
The Aadhaar database holds biometric and demographic information of the Aadhaar Card holders. While demographic details are taken usually for every identity and address proof documents, biometric data is not. It is only UIDAI that stores this information. The Aadhaar database of an individual contains fingerprints of all the ten fingers and iris image of both the eyes. The biometric data collected cannot be duplicated as it is unique for every person.
This is why the government gives importance to Aadhaar authentication for several purposes. Also, the Aadhaar Card number is unique to every individual. This is why your Aadhaar number acts as a proof during banking transactions. Thus, use of Aadhaar for authentication is considered safe and secure with low rates of malpractices.
Below-given are the objectives of Aadhaar enabled payment system:
Merchants can now receive payments digitally from their customers using the BHIM Aadhaar Pay. Under BHIM Aadhaar Pay customers can make a payment over the counter through Aadhaar authentication. The Aadhaar app allows making the payment through a thumb impression/scan. The BHIM app on the other hand uses a virtual address for payment transfers between individuals without disclosing one’s bank account number.
Using the BHIM Aadhaar Pay, merchants can digitally receive payments from customers. Through Aadhaar authentication, customers can pay over the counter to merchants. Merchants eligible are the ones with an acquiring bank on the BHIM Aadhaar Pay network.
Subscribe to our newsletter
Akshar Blue Chip IT Park, 703, Thane - Belapur Rd, Turbhe, Navi Mumbai, Maharashtra 400705