Why Aadhar enabled Payment System (AePS) will work in India?

Aadhar, the biggest biometric based system in the world has grown immensely in last few years in India, and has been debated widely for its use and misuse. Aadhar which started with authentication in India has now taken a lot into its fold like Payments, Authentication, Service delivery, paperless systems etc. It now claims to be the biggest interoperable system in the world, and is helping India Stack architecture to support its multiple layers.

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Source – India Stack

Aadhar is regulated by Targeted Delivery of Financial and Other Subsidies, Benefits and Services Act 2016, and has made Subsidies, Benefits and Services delivery to citizens almost seamless and targeted to intended beneficiaries. While few will argue, but it has immense potential and it seems that with the current trend and push in the system we are going in the right direction. Now people can open bank accounts, buy SIM cards, take LPG subsidy, do Aadhar to Aadhar transfers, Peer to Peer (P2P) transfers and a lot more which I have talked about and keep sharing in my posts.

While Aadhar has multiple benefits and use cases, let us pick up Aaadhar Enabled Payment System (AePS), and talk about it in detail.

What is AePS

AEPS is a bank led model which allows online interoperable financial transaction at PoS (MicroATM) through the Business correspondent of any bank using the Aadhaar authentication.

The five possible Aadhaar enabled transactions are:-

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There are six institutions which get involved, in processing an AePS payment and settlement;

  1. You, the bank customer
  2. Banking correspondent (BC)/Partner – The facilitator of AEPS
  3. The bank of BC/Partner– The bank to which banking correspondent is attached
  4. Your Bank – the bank with which you have the bank account
  5. NPCI – For switching, clearing and settlement of transactions
  6. UIDAI – For finger-print authentication

Following diagram will explain the AePS architecture and settlement system:

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Why AePS will work in Rural India

Everybody is talking about AePS and its viability in India, it has multiple benefits like reducing burden on banks and bring efficiency and transparency in the payment system. Let me explain few of the benefits;

1. Reduces ATM cost for banks – It helps to bring down the ATM cost for the bank, because those transactions can be easily completed by a BC for customers at much lower cost than an ATM

2. Lower MDR – AePS merchant payments aim to bring down the MDR so that more people start preferring electronic payments and even merchants would embrace it without much hit on their margins

3. Quick Pay or Accept Payments – Accept and make payments with minimum input details like;

  • Aadhar Number
  • Bank IIN or Name
  • Fingerprint

4. Safety – Your bank details are safe because you do not have to share your bank account number, IFSC code and other sensitive information with the merchant

5. Serves illiterate too – The biggest advantage of the system is that it counters the issue of illiteracy in India, because illiterate people could not use the debit card and remember PIN number, but now they can transact using their Biometrics, like finger impression and may be in future with their iris.

6. Low cost of service – Cost of serving per customer has gone down, as AePS is an infrastructure-lite model and doesn’t require bulky EDC machines and hence avoiding the huge fixed cost.

7. Portable – The biometric machine is portable and can be carried easily; it can be easily plugged in any computer or a Mobile device to make payments. This will help to facilitate door step service by Business Correspondents (BCs) & other Online and Off-Line Merchants.

8. Secured Biometric devices – The biometric devices are STQC certified and must be Level 0 and 1 compliant, as per registered device regulations and all device manufacturers must adhere to it. So, the security concerns have been addressed to much extent.

9. Secured Aadhar Infrastructure – Aadhar PKI based architecture is secured, and its ever evolving security standards ensures the banking and customer data remains secured and details are safe within the system.

With the above mentioned benefits and many more, the AePS claims to be a big hit in India as part of Digital India initiative. I hope the countries who are watching India currently for this development will surely adopt this model, and we will be a proud front runner in this space.

If the above business model interests and excites you to offer AePS services to your customers, by partnering with Spice Money a part of Spice Digital Limited, you may contact us at product@spicedigital.in and we will be happy to partner with you.

BBPS (Bharat Bill Payment System) by RBI through Spice Digital (BBPOU)

With the intent to standardise and spread the power of bill payments and access to entire ecosystem, RBI conceptualized BBPS, Pay bills Any time Anywhere system, on GIRO (General Interbank Recurring Order) based payment system.

NPCI was given the onus to develop, control and operate the integrated bill payment system offering interoperable and accessible bill payment service to customers through a network of agents, enabling multiple payment modes, and to provide instant confirmation of payments.

Last year RBI gave in-Principle approval to various Bank and Non bank entities including Spice Digital Ltd (Spice Money) to operate and appoint agent institutions (AI) to run the BBPS. After reviewing the work and capabilities RBI has awarded final license to SDL’s Spice Money to work as Bharat Bill Payment Operating Unit (BBPOU) and be part of its prestigious BBPS.

To understand the importance of BBPS and role of various participants in the system it is imperative to see the flow of its payments and settlement system.

The BBPS operation model



Figure 1 :  NPCI BBPS Presentation

Key Features of BBPS
Inter-operable BBPS will be an integrated platform connecting banks and non-banks in bills aggregation business, Billers , payment service providers and retail bill outlets
Accessible Facilitate seamless payment of bills through any channel : Digital and physical
Cost-Effective Most cost-effective for entire ecosystem
Integration BBPOUs will have to connect only to BBPCU to get access to all the billers. Utility companies just need to connect to maximum two BBPOUs to enable all customers to pay bills
Complaint Management Standardised system to handle customer grievances for both ON-US and OFF-US transactions
Dispute Management Facilitate BBPOU’s to raise and resolve disputes relating to transactions that have passed through the BBPS system
Clearing and Settlement Multiple Clearing & Guaranteed Settlements between different parties, standardised TAT
Standardisation Standardisation of processes for entire BBPS ecosystem
Brand Connect Single and trusted brand connect and BBPS Assurance


Figure 2: BBPS Product Presentation

BBPS is a system in which only defined licensed participants can operate and transact, hence all the bill payment service providers who wants to offer and accept bills as service have to come on board after the RBI’s deadline, and only these participants will be allowed to process bill payments and settlements in the system.

Companies (Established or Start Ups) who wish to operate and offer the bill payments service to their customers will have to get in touch with licensed BBPOUs like SDL (Spice Money, which has got the RBI license to operate as BBPOU in August 2017) and become their Agent Institutions (AI) / Partner Institution. Spice Digital can extend this service to any partner institutions through API (Application Programming Interface) or through deep integration directly with their Web Portal or Mobile application for both B2B (Business to Business) or B2C (Business to Customer) interface.

This will help the partner institution to get associated with SDL, which is a valued brand in the Digital Payments space. They can earn more from their retail outlets through this service and increase their product bouquet for last mile delivery.

If you are interested to be part of the Bill Payment Platform BBPS through Spice Digital and offer bill payment service through your retail outlets write to us at product@spicedigital.in

Building A Digitally Secure India: The Advent of Biometric Authentication in Financial Transactions

With digital India movement gaining momentum, our country is gradually growing more and more tech savvy. This wave of technological revolution has brought focus to maintaining the accuracy and security when it comes to keeping appropriate records. Identification through bio-metric has become a secure task that has been fast reaching far and wide in our nation of 1.34 billion. The banking industry is presently going through the age of radical transformation with the sure promise of upgraded of technological accuracy, reducing the risk of fraud and mismanagement.

Thus due to the rise in banking fraud, the regulators of financial institutions, biometric verified payments have started replacing traditional PIN, passwords and tokens with biometric security system. The traditional security keys are easy to imitate. They also prove to be ineffective in protecting customer’s information. The ‘Biometric Identification’ is more secure than the current system of passwords.

End of the Password age

Gone is the age of password since the introduction of Biometric system. The banking industry has radically evolved from the traditional security keys. The Biometric system is considered to be more suited security key for the banking industry. It is beneficial both for the consumers as well as for the banks. Biometric has been embraced as the vibrant security system. Moreover, passwords are tough to memorize.

Fingerprint identification

This is one among the new identification features. It is number one requested feature which is now available in maximum number of smart devices. You can simply save your fingerprint at a secured and authorised server base and let the device authenticate it during any transaction. Fingerprint being unique to every individual, this user authentication method ensures complete security. Now, the same technology has been finding prominence in FinTech arena.

Biometrics in Branch Banking

With the implementation of Biometric system in the bank branches, a customer can walk into any bank and the identification can be done by fingerprint or finger vein biometric scanners. The identification data of the individual matches the existed data in the bank’s database, following that, he can easily proceed towards his banking transaction. This system may help to maintain an accurate detail trail of every transaction like cash payment or cheque and can prevent the chances of fraud.

Biometrics for Online Banking and Mobile Banking

The online banking system is the most popular banking system prevailing these days. It provides an easy procedure of banking transaction from anywhere. You can use smart devices like laptops, computers and smart phones to access banking services online. Online banking is presumably seen as risky. There have been frauds related to online banking before the availability of evolved technology. There are several security steps that help online banking system protect their customers. These security measures are fingerprint scanning, facial recognition, and voice recognition.

Mobile banking has been gaining popularity pretty rapidly, all over the world. The security issues are distracting consumers from using Mobile banking. Even though cyber crime has been growing, biometric authentication has been taking off as a more secure way of authenticating transaction. As of now, new identity verification methods securities like; fingerprint identification, voice recognition, etc have entered the market as the perfect solution.

Despite the age of technological revolution, biometric authentication has been facing issues. People in the rural areas are sceptical of this technology; there is a general air of fear when it comes to technology and their hard earned money. Recently a video of a man in immense fear of authenticating identity via biometric device has been going viral. Initially these videos seem funny, but on a serious note people are actually afraid of the technology of biometric devices.

Today the Aadhaar or the UIDAI no. has taken the agenda of identity authentication by storm.  The UIDAI no. has now become a mandatory pre-requisite for all financial transactions. This has brought about convenience along with security of transactions for people in general. Aadhaar number holders and service providers can secure their biometric authentication by locking their biometrics. Country residents can unlock their biometrics before doing any biometric transaction in prevention of identity theft.

Aadhaar Enabled Payment System (AEPS) has been successfully installed in around 17,250 fair price shops. A report says that government has managed to save INR 36,144 Crore during the course of last two years using Aadhaar Payment System as a bridge.

The development of a country is considered with the advancement in its economy and that can be measured through the upsurge in bank and financial institutions. Biometric system avails an impenetrable security and hassle free transactions which was previously impossible with traditional security keys.  The idea is not just to build a digitally enabled India, but also a digitally secure India.

Image Courtesy

A Journey into the World of Mobile Payments

Mobile Payment

India is witnessing a digital revolution especially in the Fintech and payment landscape. The reason could largely be attributed to the advent and innovation of smart technologies paving a way to new-age digital banking and mobile payment system in the country. Along with this, Government and other regulatory bodies in India are making all the necessary changes to move the country from a cash-based to less-cash and ultimately to a cashless society. Let’s explore more about Digital Payments in India, their rise, major challenges and solutions.

Rise in Mobile and Digital Payments

At one point of time mobile phones in India were regarded as an item of luxury, but now it has become an item of utility making mobile a low-cost mean to access digital payments.

Mobile Payment

Most Common Ways of Mobile Payments

Now let us check how you can use your mobile to make payments!

QR Code-based Merchant Payment

QR Code payments are gaining momentum as many wallet companies are relying on this mode of digital payment. It greatly reduces the cost of merchant set up in regard to POS terminal cost. Also the merchant boarding process is much simpler in QR-Code based payment.

How to works?

  • Every merchant wallet has an associated QR Code. The QR code sticker is normally displayed at the cash-counters.
  • For making the payment, the customer scans the QR code through their mobile wallets, enter the specific amount and choose to pay through the money in their wallet.
  • After the completion of the payment, an SMS or in-app notification is sent to the merchant and the customer.

Aadhaar-based Payment

To make Aadhaar-based payment, merchant needs a biometric scanner and an account linked to the Aadhaar database. Instead of biometric scanner merchant can also use the mobile phones with iris scanners. It further reduces the set up cost as eliminates the need of biometric scanner.

How it works?

  • Customer will scan his/her finger on biometric device or iris scanner enabled on phone.
  • Verification of the customer through the Aadhaar-associated account number
  • Transaction is processed
  • Transaction confirmed through SMS / in-app notification

UPI Payments

Each customer will get a unique ID from the UPI which will act as his/her payment address. Funds can then be transferred electronically using mobile and the unique ID.

  • Customer will login to UPI app as given by the Payment Service Provider (PSP).
  • Customer enters the amount and the merchant’s information
  • Authentication of the transaction by the customer using MPIN
  • PSP will process the transaction through the UPI network and authorize by the customer’s bank
  • The customer and the merchant get a payment notification
  • The merchant now logs into the UPI app and request a payment by entering the customer’s payment address and the amount.
  • PSP processes the transaction through NPCI and sends an authorization requests to the customer
  • Customer then approves the payment. Transaction is processed by debiting the customer’s account, crediting the merchant’s account and providing a transaction notification to both the merchant and the customer

USSD Payments
*99# is a USSD (Unstructured Supplementary Service Data) based mobile banking service from NPCI that brings together diverse ecosystem partners such as Banks & TSPs (Telecom Service Providers). Using *99# service, a customer can access financial services by dialling *99# from his/her mobile registered with the bank. The service works across all GSM service providers and handsets

  1. Fund Transfer using Mobile Number and MMID – User can transfer fund using MMID and Mobile number of the Beneficiary.
  2. Fund Transfer using IFSC and Account Number – User can transfer fund using IFS Code and Account number of the Beneficiary.
  3. Fund Transfer using Aadhaar Number – User can transfer fund using Aadhaar number of the Beneficiary


With the recent demonetization drive, e-Wallets companies in India have received a huge push. You can add money in your e-wallets from your bank via credit/debit cards or net banking which then can be used to make payments. E-wallets or mobile wallets are virtual wallets allowing customers to pay for almost anything and everything. Majority of wallets are closed wallets i.e. money transference between people with the same wallet or payments at merchants can be made who are authorised to accept from that particular e-wallet.

Mobile Payment Challenges

Though number of mobile payments are increasing in the country yet these are not free from challenges. Few of the hurdles are –

Need of Global Standards

In order to make the mobile payments a reality in India, we need to have standards and interoperability in place. Achieving international compatibility, common interfaces and use of single platform for making payments will increase the mobile payment engagement.

Poor Connectivity

Two/third of India’s total population is still rural, making it approximately 870 million people. Internet penetration in most of the remote areas and rural India is a problem. This impacts the speed of transactions and results in poor customer experience. Customer might rethink to make mobile payment if a solution to poor connectivity is not found.

Digital Literacy

A large chunk of India’s population is not tech savvy and uncomfortable in using technology for making payments. Customers need to be educated and the technology must be simplified further.

Security Concerns

Mobile payment in India can gain traction only if the security concerns are met and dealt with as data security is still an issue. Most of the consumers worries about the data being  leaked to some wrong hands during processing.

Mobile Payment Challenges 

Here are the solutions to the Mobile Payment Challenges –

Mobile Payment


Blockchain – A new revolution in the Technology World

Blockchain revolution

Technology is changing every walk of life including business, financial transactions and the entire World. For instance – innovation of the Internet protocol suite (TCP/IP) has standardized the networking protocol and at the same time it revolutionized the voice and data communication. Hyper text transfer protocol (HTTP) became the most common language between clients and servers.  And now, is the turn of  ‘Blockchain’ protocol, a new entrant in the technology block. Blockchain would rewrite the way transactions happen and revolutionize the world of economy.  While TCP/IP is a communication protocol, Blockchain is a value exchange protocol.

What is Blockchain?

Blockchain is chain of digital signatures and just another kind of database for recording transactions – one that is copied to all the computers in a participating network. Data is stored in fixed structures called the “blocks”.

Features of Blockchain

  • Transactions are grouped into blocks – called the block chain
  • Transactions are grouped based on time
  • Each block points to the previous block (single parent)
  • Keeps the entire transactions secure
  • Each block contains new confirmed transactions
  • Old transactions or old blocks are never removed like Bitcoin Blockchain contains all transactions since Jan 3, 2009.
  • Blocks – can be created by anyone

Now, let’s understand Blockchain in very simple terms.

Scenario 1: I have a pen and I give this pen to you. The transaction happened does not require any 3rd person verification. I can’t give this pen to someone now, as I have already given it to you and you have the full control of it.

Scenario 2: Now, let’s think that instead of pen, I have a digital pen (say pen image) and I share it with you electronically. Digital exchange is slightly complicated because – Is there any way that you can find out that I have not created copies of it or have not shared it with anyone else but you – perhaps NO. This is technically called double-spending problem.

Now, let’s see how Blockchain addresses this problem – Blockchain creates a distributed ledger. All digital or electronic exchanges go into this ledger and are tracked and someone will be an incharge of the same. If that ledger is only with you and me, I can still cheat. However if the ledger copy is with everyone and all transactions are recorded, there is no chance of my duping you. It is not controlled by one person, so no one can cheat. Rules of the system are defined in the beginning in the blockchain code.

Here, also trust could be broken and colluders could rewrite historical records or create local records regardless of other parties’ interests and protests. Other parties may not even detect that colluders altered the historical record.  There are many mechanisms to address this problem as well, one is called proof of stake or proof of work. We will take this topic in our next blog on the same subject.

Irrespective of the type of blockchain, all have the following attributes

  • Decentralized and digitally distributed across computers in almost real time
  • Uses many participants to reach consensus
  • Uses cryptography and digital signatures to prove identity
  • Blockchain has mechanisms to make historical records editing hard
  • All transactions are time-stamped
  • Blockchain is programmable

Types of Blockchain

  • Public Blockchain
    • Permission-less
    • Anyone can read from or write data to the ledger if appropriate software is being used.
    • Parties to transaction can be anonymous
    • Typically requires additional mechanisms to arbitrate disputes among participants and protect integrity of the data
    • Secured by cryptoeconomics
    • Added complexity
    • Fully centralized
    • Public blockchains are open, and therefore are likely to be used by very many entities and gain some network effects

e.g. bitcoin

  • Private Blockchain:
    • Permission-less
    • Permissioned or trust based
    • Participants are known, trusted and have permission to update the ledger
    • Read permissions can be public or restricted
    • Transactions are cheaper due to lesser validating nodes
    • Nodes are trusted to be well connected and faults can be quickly corrected
  • Consortium Blockchain
    • Permissioned or permission-less
    • Consensus process is controlled by pre-selected set of nodes
    • Partially decentralized
    • Hybrid between low-trust provided by public block-chains and single highly trusted entity model of private block chains

It is difficult to monitor asset ownership and transfers in a trusted  business network – this is inefficient, expensive and vulnerable. However blockchain provides a solution by providing a shared, permissioned and replicated ledger which provides consensus, proves the transaction is immutable and is final


  1. Currently this technology can process 4-7 transactions per sec. whereas current digital transactions happen 10K X times more
  2. Fragmentation
  3. Regulations are under scrutiny

Seeing the value of Blockchain, deputy governor of RBI, HR Khan announced that central bank may soon setup a committee to study the use of ‘Blockchain’ technology to reduce the use of paper currency. This statement came on 24th June 2016. RBI, IDRBT (Institute for Development and Research in Banking Technology) and people from industry would work on this. Similar statement came from Rama Gandhi, Deputy governor on 19th July, in 12th IDRBT awards in Hyderabad.

Though Blockchain is a new, non-conforming disrupter, government is quite open and willing to explore this, as it has got a tremendous potential.

Aadhaar Enabled Mini ATMs – A New Age Banking Solution

Cash Withdrawal - Spice Money Mini ATM

India is witnessing a Fintech revolution owing to technological advancements and various Government initiatives. One of the most talked about initiatives is Pradhan Mantri Jan Dhan Yojana which aims to ensure access to various financial services — savings bank accounts, availability of need based credit, remittances facility, insurance and pension to low income groups across India. However, the last-mile of cash-disbursal remains a challenge even today with only 2,25,000 ATMs for all banks against the population of about 1.2 billion.

Cash Withdrawal using ATM  – A challenge to unravel

Though the number of ATM per million population is increasing i.e. from 105 in 2012 to about 300 in 2017, yet ATM market is underpenetrated in India. The country has approximately 120 ATMs per million people.

ATM Market Comparison

  • US has about 1,500 ATMs per million people
  • China has about 350 ATMs per million
  • India has only 120 ATMs per million people

Also, the cost of operating and maintaining a conventional ATM is higher and includes factors such as 24*7 power availability and security. These factors make ATM an unviable option to scale up cash out facility in semi urban/ rural areas.

New Age Banking Solution – Spice Digital launches Aadhaar enabled Mini-ATMs

With continuous efforts to bridge the divide between the served and the underserved, Spice Digital has launched Aadhaar enabled Mini-ATMs and will be shortly offering the services to customers at Spice Money retail counters. We have been authorized by the National Payments Corporation of India (NPCI) to offer Aadhaar Enabled Payment System (AEPS) services.

This service shall bring rural masses and low income groups at par with their urban counterparts. Technology and Aadhaar would play an imperative role in bridging the digital divide in India by extending banking services to all including low income groups.

A user can visit any Spice Money retail outlet near to their home or work to withdraw cash by providing the following details –

  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
  4. Amount to be withdrawn

With mini-ATMs withdrawing cash is now easy, secure and convenient. Read our blog – AEPS – Leading a Way to New Age Banking to know more about Aadhaar enabled payments.

Interested to join our team! Visit our page – b2b.spicesafar.com

Sound Based Payments – The way to go forward

what is sound based payment technology

The magical combination of increasingly connected world, technological innovations and expanding mobile phone market is greatly transforming Fintech industry. India currently is witnessing a transition from a traditional cash driven to cashless economy. Amid this revolution, Finetch firms are embracing technology and leveraging growth of mobile owners to make payments much easier and secure for the end users.  Latest ship at the dockyard of technology is “Sound based Payments”. This radical technology is definitely a game changer enabling payments without Internet connectivity.

While our devices are ever more connected, but still poor connectivity while using Internet is a big hurdle for making payments. In such a case, data is transferred using peer-to-peer connectivity like Bluetooth, Wi-Fi Direct, or Near-field communication (NFC). But again, these solutions have specific requirements of hardware and APIs which may not be available in all the devices. However, every device comes with a microphone and a speaker. So here comes an alternative, i.e. data transmission using sound waves.

Thus, use of sound based transmission in the form of “Sound Based Payment” is going to benefit the Fintech industry the most. Such payments work independently of Internet connectivity or communication tool such as NFC to enable payment. User can offer payment from smartphones, feature phones, card swipe machines and point-of-sale devices with the use of sound.

Benefits of sound based payment

Working of Sound Based Payments              

Sound based payments can be made by anyone having a bank account and a mobile phone. Using a unique ultra high frequency encrypted sound-based technology will enable you to pay directly from any of your bank accounts or credit/debit cards to the merchant account offline.

In the process of Sound wave technology, data is encoded into sound waves with the help of an algorithm which can then be transmitted to make offline payments. To make this happen, algorithm has to be integrated in the buyer’s mobile phone as well as the merchant’s phone or card readers.

  1. Merchant enter payment detail like bill amount on his device
  2. Numbers are converted to analog format with using the Algorithm
  3. Encrypted analoged data is transmitted to buyer’s phone as a sound signal
  4. Buyer’s phone is placed near merchant’s device to receive signals
  5. Buyer’s phone receivess data and decrypts the received data.
  6. Payment can then be made using debit card / credit card / digital wallet.

Working Prototype:

Using this technology we have built a prototype. This prototype has an input field where you can type the text you want to send. When you press the “Send” button, the data is continuously broadcasted alternatively with the Barker code. When another user is close enough to pick up the signal he can press the “Receive” button to get the data on his phone.  If the decoding failed (probably due to the surrounding relatively strong interference), it continues to monitor a sound wave transmission, continue decoding.

It is the magical new way to share your stuff – using sound. We can easily transfer any data and it would just require one action from the sender (starting to broadcast) and one action for the receiver (starting listening to all broadcasts).

AEPS – Leading a Way to New Age Banking

Aadhaar Enabled Payment System

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

  1. 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.
  2. Enhancing financial inclusion
  3. Facilitating the disbursements of various schemes like NREGA, MGNREGA
  4. Digitization of retail payments and thus assisting in financial policy making
  5. Interoperable, safe, convenient, secure service offering full range Aadhaar based banking solutions.
  6. NPCI to act as a central switching and clearing house for Aadhaar initiated banking transactions

What are the Pre-requisites for using AEPS?

  1. A resident of India holding an Aadhaar number and having a bank account may become a part of the Aadhaar Enabled Payment System.
  2. Customer needs to have a bank account linked to his/ her Aadhaar number with bank offering AEPS services
  3. In case of multiple accounts linked with Aadhaar, only primary account will receive all the AEPS transactions
  4. 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.
  5. 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.
  6. AEPS transactions can be initiated during the business hours of the respective BC centre of the sponsored bank.
  7. 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

Bharat Bill Payments System – A Digital Bill Payment Initiative by NPCI

The National Payment Corporation of India (NPCI) with its plan to digitize bill payments across the country will join the Digital India initiative. The NPCI is developing an integrated Bharat Bill Payments System to provide an ease of ‘anytime anywhere’ payment of all kinds of bills to customers. This will cover water, DTH and telecom with a plan of expanding and covering school fee, university fee, municipality taxes, mutual funds, insurance premiums etc after approval from the RBI.

Customers can easily pay bill from retail points using various payment modes such as credit card, debit card, mobile wallet, net banking (IMPS, NEFT) after getting registered with Bharat Bill Payments System. Process of registration can either be done online or by walking into any BBPS outlet. The customer would share detail such as his name, address, email id, mobile number and an identification document. After registration, a Customer ID would be given to the customer that will be used in all future transactions. This would definitely change the bill payments being done today.

The biggest beneficiaries of this entire change are going to be the domestic remittance companies and business correspondents of the banks having huge retail presence across the country.