Digital payment modes such as mobile wallets, UPI, contactless, payment cards, and QR codes have enabled universal access to financial services. But they still leave a gap for senior citizens, underprivileged, and inerudite sections of the society. These sections find it challenging to buy a smartphone or a payment card or even remember a passcode or PIN. Thus it becomes harder for them to join the digital Indian ecosystem.
To resolve these challenges and to enable people from all walks of life to benefit from digital financial services, Aadhaar enabled Payment System (AePS) was brought into existence.
Aadhaar, driving inclusivity, and benefits
Aadhaar is a 12-digit individual identification number issued by the UIDAI (Unique Identification Authority of India) on behalf of the Indian Government. In India, the Aadhaar number serves as a proof of identity and address. Any citizen of India is eligible to apply for Aadhaar Card. They can receive it via India Post, and as an e-Aadhaar downloaded from the UIDAI website.
Aadhaar, the world’s largest biometric ID system, has been a crucial enabler of inclusive financial services in India. It captures fingerprints, retinal scans, and facial identification as chief authentication factors for transactions. So, the bank customer need not carry a smartphone or a payment card, or remember PINs and passwords.
More than 131 crore adults registered with Aadhaar have seamless access to banking services, insurance, and direct benefit transfers from over 700 financial inclusion schemes announced by the central and state governments.
India’s financial inclusion index stands at 53.9, which is an impressive display of inclusivity brought about by Aadhaar.
What is AePS?
Aadhaar enabled Payment System (AePS) is a payment system that facilitates interoperable digital financial transactions through Aadhaar card-based verification (quick eKYC). It uses a Unique Identification Number or the Aadhaar number to make transactions effortlessly. Serving as a simple, secure, and user-friendly platform, AePS helps blue-collared workers, senior citizens, and the underprivileged to benefit from cashless transactions.
AePS is a bank-led model, and any Indian resident can utilize the service just with their Aadhaar number that is linked to their bank account — Aadhaar Enabled Bank Account (AEBA). The Aadhaar enabled Payment System allows online transactions to take place at PoS (Micro ATM)/Kiosk/mobile devices through the Business Correspondent (BC) of any bank using Aadhaar authentication.
Leveraging AePS, banks can empower all segments of society by increasing user-friendly access to cash deposits, payments, money transfers, and withdrawals. AePS use cases are accessible at any biometric-enabled touchpoint, viz., all-in-one integrated devices, mobiles/PCs/tablets, or any accessories that meet the technical specifications defined by UIDAI. By enabling AePS solutions, banks can enable seed status checks for direct benefit transfers, social security pensions and government subsidies.
What are the requirements for AePS transactions?
AePS does not need a smartphone, document, or payment card. It only requires the customer to link the Aadhaar card to the bank account to capture the following info.
- Aadhaar Number
- Biometrics-fingerprint identification
- Name or Bank Issuer Identification Number (IIN)
If not, just remembering the last four digits of the Aadhaar number will do. The Business Correspondent with an AePS machine or Micro ATM on assisted mode should be able to do any transaction for the customer.
Key objectives
The main objective of AePS is to use Aadhaar number/ Virtual Identity to access AEBA for banking transactions through Business Correspondents (BC).
Greater security, trust, and inclusion
When banks and merchants offer AePS, their customers can easily transact just with biometric authentication, either a face recognition, iris scan, or fingerprint identification. All these three aspects can never be forged, ensuring secure transactions.
Banks and merchants can gain more customers through AePS as transactions can happen without the need of a physical card, passbook, smartphone or any other document. This will improve customer trust and confidence to make transactions in rural areas, especially among the underbanked segments. Banks across India are attributing enhanced revenue and cost-cutting to AePS offering.
Want to add AePS to your payment ecosystem? Write to us at support@paytelgroup.com
