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Aadhaar Enabled Payment Systems

The UIDAI to enable more financial inclusion with Aadhar card has allowed Aadhaar Enabled Bank Account (AEBA) holders from marginalized sections of the society to have access with the banking system.

The UIDAI, which acts as a centralized authority for aadhar has joined hands with Reserve Bank of India (RBI) and National Payments Corporation of India (NPCI) to develop a platform mainly focused towards the marginalized section to secure access to banking via micro ATMs by using Aadhaar authentication.

What is AePS?

The term AePS which stands for Aadhaar Enabled Payments Systems which aims to facilitate the financial inclusion via Micro ATMs or Point of Services which will be set up through the business correspondent of any bank using the Aadhar based authentication. The AePS allows an individual to carry on six types of transactions.

Under this AePS, customers are required to provide the following inputs to carry on transactions:

  • Aadhaar Number
  • Identifying the Bank to which the customer is associated (IIN)
  • Fingerprint captured during their enrollments

Services offered by AePS

The following are the list of services provided by AePS:

  • Balance Inquiry
  • Cash Withdrawal
  • Mini Statement
  • Cash Depository
  • Best Finger Detection
  • Aadhar to Aadhaar Fund Transfer

Objectives of AePS

The following are the main objectives of AePS

  • To enable banks in India to route the aadhar initiated inter-bank transactions via a central switching and clearing agency.
  • To build a strong foundation for a full range of Aadhar enabled banking services.
  • To facilitate inter-operability across the banks through a safe and secure manner.
  • To build a strong foundation for a full range of Aadhar enabled banking services.
  • To subserve the RBI’s goal in electronification of retail payments.
  • To facilitate the government of India’s entitlements like Social Security Pension, Handicapped Old Age Pension Schemes, NREGA and so on of both the Central and State government entities via aadhar and authentication thereof as supported by the UIDAI.
  • To Sub – Serve the goal of the government of India and the country’s Central Bank (RBI) in encouraging financial inclusion.

How Does AePS Work?

Step 1: To begin with, the customer will have to give his/her aadhar number details, fingerprint data and financial transaction via a micro ATMs

Step 2: Proceeding further the digital data, which will be in an encrypted form will be sent to the UIDAI through a ‘Bank Switch’

Step 3: The data will be verified and authenticated by the UIDAI and the result of the same will be reflected either with a YES/NO as a response.

Step 4: If the response is “YES”, then the bank will initiate the required authorization.

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