Aadhaar Enabled Payment Service is an innovative system developed by NPCI to enhance financial accessibility for all Indians. AEPS utilizes Aadhaar information to enable transactions through intermediaries. It has been implemented by the government. AEPS serves as a convenient tool for promoting financial inclusion. In this article we will discuss about Aadhaar Enabled Payment Service and uses of this service.
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What is Aadhaar Enabled Payment Service?
AePS (Aadhaar Enabled Payment Service) is a digital banking platform created by NPCI specifically for India. With AePS, you can make online transactions at dedicated machines or even on your phone, as long as you have your Aadhaar number for verification. To access AePS, you must have an Aadhaar-linked bank account. This convenient service empowers individuals with an Aadhaar number to access banking services easily.
Objectives of the Aadhar enabled Payment System (AePS)
- Aadhaar enabled payment service (AePS) aims to advance India’s digital transformation and promote the use of cashless transactions.
- To make banking and financial services accessible to all citizens through Aadhaar verification.
- To align with the government and the goal of financial inclusion of RBI.
- To foster the acceptance of digital payments and transactions.
- To create an ecosystem of Aadhaar enabled banking services which enhance the convenience of financial operations for all.
Benefits of Aadhaar enabled Payment System (AePS)
- Ease of Use: AePS simplifies the banking services by only requiring Aadhaar verification.
- Security and Interoperability: It ensures the secure transactions across multiple banks which eliminates transaction hassles.
- Financial Inclusion: AePS extends the banking access to a wider population which promotes financial inclusiveness.
- Simplicity: Simply link your Aadhaar to your bank account and you are ready to use AePS.
- Biometric Authentication: Transactions through AePS require only your Aadhaar number and biometric data which provide the added security.
Who can participate in AePS?
The following person can participate in Aadhaar Enabled Payment Service.
- Banks: Eligible banks can apply to NPCI/UIDAI for approval to provide AePS services.
- Customers: Individuals with a valid Aadhaar number can open a linked bank account to access this service.
- Merchants: Merchants can join the AePS network through authorized banks to receive payments from customers.
- Other Entities: Regulated entities and government departments can apply to NPCI/UIDAI to utilize AePS, especially for eKYC services.
How to use Aadhaar enabled payment service ?
Money transfer
People like Hemant, who work in urban areas but need to send money to their families in rural areas, can benefit from AePS. By using their Aadhaar numbers and biometric information, along with the Aadhaar number of the family member receiving the funds, they can transfer money to remote locations.
Cash Deposit through Micro ATM
During the busy harvest season, Ram, a farmer, takes advantage of a convenient alternative to visiting a bank. He uses a Micro ATM at his local market which allows him to deposit cash directly into his Aadhaar-linked bank account, saving him from having to travel to a bank branch.
Balance enquiry
When Riya, a frequent traveler for work, needs to check her account balance, she can do so effortlessly using Aadhaar Enabled Payment service, regardless of her distance from a bank branch. This convenient service enables her to monitor her expenses while on the move.
Remote banking service
People living in remote areas, like Ram, can use AePS to access basic banking services through authorized agents in their village. Using only their Aadhaar information, they can withdraw cash and check their account balances.
Cash withdrawal
When Pooja, a student, urgently needed cash, AePS saved the day. She used a small, portable device operated by a business representative which is called a Micro ATM, to withdraw cash easily and promptly.
SHG banking
Sita manages a self-help group and handles its banking responsibilities. Using the AePS system, she can conveniently complete banking tasks such as making payments to vendors and reviewing account balances without visiting a physical bank branch, which saves her both time and expenses.
Tracking transactions
Without using a smartphone, Saroj, a baker, can easily access his transaction details by obtaining a mini statement from a business correspondent near his location through AePS. This service eliminates the need for a smartphone and significantly reduces the time and effort required.
Cashless merchant payments with BHIM
Asif, a shopkeeper, finds the BHIM Aadhaar Pay app easy to use for receiving payments from customers. Both Asif and his customers benefit from not having to deal with the hassle of carrying cash or calculating change.
Aadhaar fund transfer
Girish, a manager, frequently transfers funds to his parents using the Aadhaar to Aadhaar fund transfer facility. He utilizes a Micro ATM close to his office for these transactions, ensuring a speedy and hassle-free process.
Important Points while using AePS
- Your bank account must be connected to your Aadhaar card.
- Only your primary account will be accessible for AePS if you have multiple accounts with the same bank.
- AePS transactions do not require an OTP or PIN.
- AePS transfers funds only between Aadhaar-linked bank accounts.
- You can link multiple bank accounts to Aadhaar for AePS, but only one account per bank can be active.
- AePS transactions, including those completed before 11 pm, are processed daily at 11 pm.
Fund Transfer Limit
The Reserve Bank of India (RBI) does not mandate a specific transaction limit for Aadhaar Enabled Payment service, but banks have their own restrictions to prevent abuse. As a result, certain banks may cap daily AePS transactions at Rs 50,000 to minimize the risk of unauthorized usage.
Read more: What is Difference Between RTGS and NEFT – Latest Guide
Conclusion
AePS is changing how people use and get to banking services in India. It makes it easy to verify your Aadhaar and do transactions. This helps people all over the country, from small villages to big cities. AePS makes banking easier and more accessible. However, it’s important to follow the rules set by banks and the government to use AePS safely and well. As AePS grows and changes, it will play a big part in making finance more available and digital in India, making banking easier and more accessible for everyone.
Frequently Asked Questions (FAQ)
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Wow, I had never thought about it in that way before You have really opened my eyes to a new perspective Keep up the great work!
Thanks Benjamin!