Aadhaar Enabled Payment System (AEPS)

Here is how Aadhaar Enabled Payment System works:

• You can visit any business correspondent or AEPS-enabled store to complete transactions after you have connected your Aadhaar card to your bank account
• You must choose the kind of service you want, such as fund transfers, cash withdrawals, balance inquiries, etc.
• Your requested banking operation will be completed instantly once the system confirms the authenticity of your biometric information and Aadhaar card number
• As a result, you can have a smooth transaction without the need for actual debit cards or PINs.
• To complete any AEPS transaction, you only need to provide three things: your bank's name, your Aadhaar number and the biometric details captured during your Aadhaar enrolment. 

Features and Benefits of Aadhaar Enabled Payment System

The features and benefits of Aadhaar Enabled Payment System are as listed below:

Transactions are linked by Aadhaar card: The Aadhaar card holders can carry out transactions using their Aadhaar linked bank accounts.

Biometric authentication: Transactions are authenticated by providing the Aadhaar number and biometric details (fingerprint, face, or iris scan) at Points of Sale (PoS) or micro-ATMs operated by Business Correspondents of Paytm Payments Bank, ensuring secure and dependable transactions.

User-friendly: AEPS is designed to be easily understandable and navigable, facilitating individuals in conducting diverse financial transactions.

Empowerment of the underprivileged: AEPS plays a pivotal role in empowering marginalized and underprivileged segments of society by granting them access to banking services and facilitating digital financial transactions.

Interoperability: The AEPS system fosters interconnectivity among banks in a secure manner, offering a convenient avenue for transferring and receiving funds, thus obviating the necessity for physical visits to bank branches.

Basic banking services: The AEPS enables Aadhaar card holders to execute various fundamental banking transactions such as cash deposits, withdrawals, balance inquiries, mini-statements, and Aadhaar-to-Aadhaar fund transfers. These transactions can be performed through a banking correspondent.

Objectives of Aadhaar Enabled Payment System

The objectives of Aadhaar Enabled Payment System are as listed below:

Empowering Customers: Through business correspondents, allow bank clients to use Aadhaar as identity verification for routine banking operations such deposits, withdrawals, cash transfers, balance inquiries, and mini statements

Digitizing Retail Payments: Promote electronic transactions to ease the shift to a cashless economy

Simplifying Aadhaar-Based Transactions: Permit banks using a centralized switching and clearing system to handle Aadhaar-initiated interbank transactions

Improving Government Benefit Disbursement: By using Aadhaar for authentication, government subsidies and welfare programs like social security pensions and NREGA would be distributed smoothly

• Providing a safe and secure system that permits Aadhaar-linked transactions between various institutions is necessary to ensure secure banking

Boosting Aadhaar-Enabled Services: Create a solid basis for upcoming Aadhaar-based banking innovations and solutions.

How BHIM Aadhaar Pay Supports Merchant Payments

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. Any merchant associated with an acquiring bank on the BHIM Aadhaar Pay network can accept payment from a customer of any bank.

The merchant can do so by authenticating the customer's biometrics (which is for now only fingerprints) and receive payments from the customer's Aadhaar enabled bank account instantly. The merchant must have an Android mobile with the BHIM Aadhaar app to perform this activity.

Services Provided by Aadhaar Enabled Payment System

Here are the services provided by Aadhaar Enabled Payment System as follows:

Cash Deposit: At any micro-ATM, customers can easily deposit money into the bank account associated with their Aadhaar card

Cash Withdrawal: Additionally, you can use your Aadhaar number at micro-ATMs to access your bank accounts connected to your Aadhaar card and make cash withdrawals from them

Balance Enquiry: You can choose to use AEPS services to periodically check your bank balance using your unique Aadhaar number and biometric information

Transfer of funds from Aadhaar to Aadhaar: The ability to securely move money from your Aadhaar-linked bank account to other bank accounts that are also connected to the corresponding customers' Aadhaar cards is one of the main benefits of AEPS

Small Bank Statements: Users can also obtain requests for financial services, such as obtaining mini-bank statements, using the AEPS. You can better manage your funds by seeing an overview of your recent transactions

Aadhaar Pay for BHIM: Additionally, users can use their unique Aadhaar number to make cashless payments through AEPS at any merchant business.

The following are the other services that the AEPS provides:

• EKYC
• Tokenization
• Status of Aadhaar seeding
• Verification

Dual Authentication: AEPS also supports dual authentication for certain transactions, an additional verification layer that strengthens security beyond a single biometric check.

How to Use an Aadhaar Enabled Payment System?

By following the easy steps listed below, customers who have their bank accounts connected to their Aadhaar cards can utilize the Aadhaar Enabled Payment System:

• Select a banking correspondent or a mini-ATM nearby
• Enter your unique 12-digit Aadhaar number
• Choose the Type of Transaction you want to use and enter the bank's name
• To continue, enter the transaction amount
• Verify your desired payment by authenticating your biometric data (i.e., scan and fingerprints)
• After your requested transaction is successfully completed, you will receive an automatically created receipt.

Process of AEPS Cash Withdrawals

To withdraw money via AEPS, you must go to the closest micro-ATM, input your unique Aadhaar number, choose cash withdrawal, enter the amount, and use your biometric information to confirm the withdrawal.

As a result, you can choose to withdraw cash via AEPS without the need for actual cards or PINs. However, your 12-digit unique Aadhaar number, your fingerprints or iris scan, and your IIN (Banker's Issuer Identification Number) are some of the key components of information you will require for the process.

Fee Structure for the Aadhaar Enabled Payment System (AEPS)

The following are among the charges associated with the AEPS:

• According to UIDAI's regulations governing fees for cash withdrawals using the Aadhaar Enabled Payment System, there are currently no fees associated with this service
• A fee of up to 1% of the transaction value may be imposed by the bank for fund transactions. There is a maximum price of Rs. 15 and a minimum fee of Rs. 5.

Transaction Limit of Aadhaar Enabled Payment System (AEPS) 

The daily limit of Rs. 50,000 on total transactions has been set by certain banks. The NPCI has ordered that each AEPS transaction has a maximum withdrawal limit of Rs. 10,000. 

Important Considerations for Using AEPS 

The following are some important things to consider when utilizing the Aadhaar Enabled Payment System: 

• When choosing to use AEPS for banking transactions, it is important to keep in mind that your bank account needs to be connected to your Aadhaar card. Only after bank accounts are connected to the user's Aadhaar cards will you be allowed to request any financial activity through the AEPS 
• When requesting financial operations through AEPS, users must make sure their Aadhaar-linked bank accounts are operational because these services are only accessible to clients who have active Aadhaar-linked bank accounts 
• You should keep in mind that AEPS transactions can only be made through one bank account if you have multiple bank accounts connected to your Aadhaar card. This is often the customer's main bank account. Therefore, if you have several bank accounts connected to your Aadhaar card, it is crucial to make sure your principal bank account is operational.
• Eligibility is based on Aadhaar-bank linkage: any Indian resident whose Aadhaar number is linked to a bank account, sometimes called an Aadhaar Enabled Bank Account, can use AEPS services.