Your Complete Guide on Aadhaar Enabled Payment Systems
24 January, 2023
In the past few years, the Government of India has concentrated efforts for India’s transition to a cashless economy. The government has introduced various measures, one of which is the Aadhaar Enabled Payment System (AEPS). AEPS is a bank-led model that allows financial transactions via Aadhaar authentication. As a business owner, you can make the most of this new and convenient method of conducting financial transactions.
What is Aadhaar Enabled Payment System?
AEPS, constituted by the National Payments Corporation of India, is a payment system that uses Aadhaar Cards to conduct banking transactions. Cardholders can complete transactions by providing their biometric information at a Point of Sale (POS) or Micro ATM (Automated Teller Machine) terminal. The transaction takes place via their Aadhaar-enabled bank account. The specifics of AEPS are as follows:
AEPS transactions go through the Aadhaar-linked bank account in a manner similar to debit/credit card transactions.
Cardholders must provide their Aadhaar number and biometric details (iris or fingerprint scans) at POS and Micro ATMs to complete the transactions.
Users do not need to provide bank details to complete an AEPS transaction.
With AEPS, users can initiate fund transfers from one bank to another.
Biometric authentication to complete financial transactions makes AEPS transactions incredibly secure.
What are the Aadhaar Enabled Payment System Services offered by banks?
The banking services offered via AEPS include:
Cash withdrawal
Cash deposit
Payment transactions (C2B, C2G Transactions)
Mini statements
Balance enquiry
Authentication
Aadhaar to Aadhaar fund transfers
BHIM Aadhaar Pay
The additional services offered under AEPS are:
Demo authorization
Best finger detection
Tokenisation
Aadhaar seeding status
How the Aadhaar Enabled Payment System works?
The AEPS machine functions like a POS machine. However, instead of a credit or debit card, sellers must plug in the customer’s Aadhaar details and use their biometrics to authenticate the transaction. Buyers also need to provide their bank’s Issuer Identification Number or name.
Cardholders must have a bank account linked to the Unique Identification number (Aadhaar). If multiple accounts are linked to an Aadhaar Card, the primary account will be used to conduct transactions. Plus, a Personal Identification Number (PIN) or One Time Password (OTP) will be required to complete the transaction.
Benefits of using the Aadhaar Enabled Payment System
AEPS is designed to promote financial inclusivity and offers the following benefits:
The payment system is accessible and easy to use.
It is secure because it calls for a unique identification number and biometric data.
It allows underprivileged sections of society to avail of modern banking services.
Users need not provide bank details to complete transactions.
Users can easily access their bank accounts and complete transactions quickly.
Since Micro ATMs and POS machines are mobile and can be used in remote areas, AEPS brings more users into the fold.
As a business owner, AEPS can be a significant plus for your enterprise. Since it allows more sections of society to use modern banking, it can help your business attract new customers. Plus, paying via AEPS is easy, efficient, and quick, making the checkout process hassle-free while converting random browsers into purchasing customers. You can use the AEPS machines in your store, regardless of the size or scale of your operations, and allow your customers to purchase your goods and services securely.
Financial services with HDFC Bank
Now that you know about AEPS and how it works, consider it as a convenient payment method with the potential to benefit your business. However, there is scope to expand beyond just direct revenue, by leveraging cutting-edge financial solutions from HDFC Bank such as Business Loan, Overdraft Facility etc.
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*Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances
