What is Aadhaar Enabled Payment System - AePS
AEPS stands for Aadhaar Enabled Payment System which is the Android-based app by that allows Android mobile phone users to digitally transact using their Aadhaar number, either fingerprint or iris authentication and one-time password (OTP). Application rolled out by the Unique Identification Authority of India (UIDAI). This Android-based application can be downloaded by the merchants. The dealers just need any smart phone and a fingerprint scanner to use it. The Transactions on AEPS app can be done without any card or PIN, just by using Aadhaar Card number and required authentication methods and Technology
AePS or Aadhaar Enabled Payment System is a digital payment service based on Aadhaar authentication. You can access your Aadhaar-linked bank account and perform basic banking transactions like balance enquiry, cash deposit, cash withdrawal, remittances through a Business Correspondent (a bank representative).
Elements of Aadhaar Enabled Payment System
- How does AEPS work?
- Benefits of Aadhaar Enabled Payment System AEPS
- Transactions through the AEPS
- Requirements for AEPS
- Why Aadhaar for Authentication
- How Aadhaar Authentication Works
- How Aadhaar Enabled Payment System Works
- Charges of AEPS
How does AEPS work?
Aadhaar Enabled Payment System (AEPS) is a bank led model, which allows online financial inclusion transaction at Micro-ATM through the Business correspondent of any bank using the Aadhaar authentication. This system is designed to handle both ONUS and OFFUS requests seamlessly in an effective way by enabling authentication gateway for all Aadhaar linked account holders
What are the Benefits of using AePS
- Enables quick, safe and secure payment
- Eliminates the possibility of fraud
- Facilitates inter-operability across banks in a safe and secure manner
- Enables banks to extend financial services beyond their branch network
- We can perform financial and non-financial transaction through the banking correspondent.
- A banking correspondent of any bank can do the specified transaction of any bank.
- There is no need of signature or debit card.
- It is fast and secure. No one can forge your fingerprint.
- Banking correspondent can reach to the distant rural place with the micro POS.
What kind of Transactions can be done under AEPS?
The Aadhaar Enabled Payment System - AePS gives you banking facility on the go. However, It gives you only basic services. These 4 services can be done through the AEPS.
1. Balance Check / Balance Enquiry
2. Cash Deposit
3. Cash Withdrawal
4. Aadhaar to Aadhaar Fund Transfer
Except Fund transfer, you can perform all the transactions through the banking correspondent of any bank. For fund transfer, you need the BC of your own bank.
What does one require to do transaction under AEPS?
Through the Aadhaar Enabled Payment System, you can get money without producing any paper or card. However, your Aadhaar number should be registered with your bank account. If you did not linked your Aadhaar with a bank account the Aadhaar Enabled Payment System would not be useful to you. For AEPS transaction, you need following information.
1. Aadhaar Number
2. Bank IIN or Name
It means, we have to only remember your Aadhaar number to do the bank transaction. It is just like remembering own mobile number.
Why Aadhaar for Authentication
Please remember it is mandatory, at the time of Aadhaar enrolment, your fingerprints and iris image were taken. These biometric data gets linked to the given Aadhaar number. These biometric data is unique to a person. No two person have the same iris image or fingerprints. Thus, your Aadhaar number can be verified by your finger prints. This biometric authentication makes Aadhaar the perfect proof for the banking transactions. Indeed, it has replaced the signature.
How Aadhaar Authentication Works
Suppose, you claim to be Vijay and produce the Aadhaar number of Vijay. To verify it, bank official would take your fingerprints in a machine. The machine gives the fingerprint details to Aadhaar Payment app. The app immediately tallies your fingerprints with the fingerprints of the given Aadhaar. If it matches, the system would permit for the transaction. In case of mismatch, the system would not do any transaction.
How Aadhaar Enabled Payment System Works
It surprising that only through the Aadhaar number you can access your bank account. But it is possible because the Aadhaar is linked to your bank account. This linking leads you to your bank account. The fingerprint is authenticated by the UIDAI. In response to a transaction, UIDAI tells to the bank about the authenticity of the user. Once, UIDAI authenticates, the bank gives green signal to the transaction.
Thus, in the Aadhaar Enabled Payment System 6 institutions are involved.
1. You, the bank customer
2. Banking correspondent – The facilitator of AEPS
3. The bank of BC – The bank to which banking correspondent is attached
4. Your Bank – the bank with which you held the bank account
5. NPCI – It does switching, clearing and settlement of transactions
6. UIDAI – For finger-print authentication
Charges of AEPS
Unlike UPI, the AEPS is a relatively costly transaction. It can go uptoRs 15 for one transaction. On the other hand UPI charge is free to nominal. For AEPS, three institution involved can charge fees.
•UIDAI may charge nominal fees for authentication, however it is not charging yet.
•The NPCI charges 10 paise for authentication and 25 paise for settlement.
•The bank can charge 1% of the transaction value if it is related to other bank. The minimum fess for other bank transaction would be Rs 5 and maximum fees would be Rs 15.
AEPS may be costly than UPI and USSD but it gives a lot of convenience to the rural people. It would bring bank to their doorstep and save much time and transport expense. It would be just like a visit of ATM at every doorstep. That is why government calls the POS as micro ATM.
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