Overview
Learn about AEPS, its purpose for financial inclusion, and how to perform banking transactions using Aadhaar number and biometric authentication.
Aadhaar Enabled Payment System (AEPS)
The Aadhaar Enabled Payment System (AEPS) is a bank-led model that allows online interoperable financial transactions at Point of Sale (PoS) terminals through the Business Correspondent (BC) of any bank using the Aadhaar authentication.
Purpose:
AEPS was launched by NPCI to facilitate financial inclusion by enabling individuals to perform basic banking transactions using their Aadhaar number and biometric authentication (fingerprint or iris scan), especially in rural and remote areas where traditional banking infrastructure is limited.
Services Offered:
- Cash Deposit: Deposit money into your Aadhaar-linked account.
- Cash Withdrawal: Withdraw cash from your Aadhaar-linked account.
- Balance Enquiry: Check the balance of your Aadhaar-linked account.
- Mini Statement: Get a short statement of recent transactions.
- Aadhaar to Aadhaar Fund Transfer: Transfer funds between two Aadhaar-linked accounts (though less common now).
How AEPS Works:
A customer visits a Business Correspondent (BC) agent with a micro-PoS device. The customer selects the transaction type, enters their Aadhaar number, selects their bank, and then authenticates the transaction using their fingerprint or iris scan. The transaction is processed instantly.
Benefits:
- Accessibility: No need for signatures, debit cards, or remembering PINs.
- Simplicity: Easy to use for individuals with limited literacy.
- Security: Biometric authentication ensures high security.
- Interoperability: Works across different banks.
Exam Tip:
Remember that AEPS is an NPCI initiative for financial inclusion, primarily using Aadhaar and biometrics. Know the basic services like cash withdrawal and balance enquiry.