What is Aadhaar Enabled Payment System?
Aadhaar Enabled Payment System or AEPS is a payment service developed by the National Payments Corporation of India (NPCI) allowing banks, financial institutions to use “Aadhaar” number and online UIDAI authentication for transactions through their respective Business correspondent service centres. AEPS, a new age banking service has been approved by the Reserve Bank of India (RBI).
AEPS functions through the National Financial Switch of NPCI, which is also used for routing interbank ATM transactions and Interbank Mobile Payment Service (IMPS).
Aadhaar – a key enabler as a part of JAM (Jan Dhan Yojana, Aadhaar and Mobile) plays a key role in AEPS.
What does a customer need for doing transactions under AEPS?
The inputs required by the customer to do a transaction under this scenario are:-
1. Issuer Identification Number (IIN) – It is a unique, six digit number issued by NPCI to bank. Previously known as BIN or Bank identification number, IIN identifies the bank to which the customer has mapped his/her Aadhaar number.
2. Aadhaar Number
3. Fingerprint captured during their enrollment
What are the key objectives of Aadhaar Enabled Payment System?
Key objectives of AEPS, as per GoI and RBI are
- Empowering the customer to use basic banking functionalities such as balance enquiry, cash withdrawals, cash deposits and Aadhaar to Aadhaar funds transfer, remittances across banks (both intrabank and interbank) using his/her single identity i.e. Aadhaar.
- Enhancing financial inclusion
- Facilitating the disbursements of various schemes like NREGA, MGNREGA
- Digitization of retail payments and thus assisting in financial policy making
- Interoperable, safe, convenient, secure service offering full range Aadhaar based banking solutions.
- NPCI to act as a central switching and clearing house for Aadhaar initiated banking transactions
What are the Pre-requisites for using AEPS?
- A resident of India holding an Aadhaar number and having a bank account may become a part of the Aadhaar Enabled Payment System.
- Customer needs to have a bank account linked to his/ her Aadhaar number with bank offering AEPS services
- In case of multiple accounts linked with Aadhaar, only primary account will receive all the AEPS transactions
- There is no separate registration or enrollment required for AEPS if bank account is linked to Aadhaar number. However, if the bank account number had not been linked to Aadhaar at the time of Aadhaar enrollment then customer has to approach his/her bank for linking bank account with Aadhaar number.
- Beneficiary customer should also have an Aadhaar (UID) number linked with any bank, with which they maintain an account (bank should be a part of AEPS network) and in which he intends to receive the credit.
- AEPS transactions can be initiated during the business hours of the respective BC centre of the sponsored bank.
- Minimum balance for AEPS transaction is decided by the respective bank where customer has the Aadhaar linked bank account number
How does the safety and security of AEPS transactions ensured?
AEPS is a safe and convenient channel enabling micropayments. Every terminal (MicroATM) has the encryption as per UIDAI norms & in case of any deviation, transaction will get rejected with an error code as “invalid encryption” on the terminal.
AEPS only supports real time online biometric verification using the Aadhaar number. The fingerprints/biometrics submitted during the enrolment of the individual need to match at the UIDAI server end to make any transaction successful.
How can customer check if his Aadhaar linked bank supports AEPS?
Customer can check the details on www.npci.org