What is Aadhaar Enabled Payment System (AEPS)

Explore the Aadhaar Enabled Payment System (AEPS) – your guide to seamless and secure digital transactions.
What is Aadhaar Enabled Payment System (AEPS)
5 min read
02 April 2024

In the ever-changing landscape of digital transactions, the Aadhaar Enabled Payment System (AEPS) has emerged as a secure and easy way to conduct financial transactions. The new technology uses the Aadhaar Card, India's unique identifying system, to facilitate seamless transactions.

It is crucial to keep your Aadhaar details up to date. Your Aadhaar card can assist in covering emergency expenses. For or immediate financial support, a copy of your Aadhaar card is necessary as it serves as your KYC document to obtain funding options such as personal loans.

What is the Aadhaar Enabled Payment System (AEPS)?

The Aadhaar Enabled Payment System, or AEPS, is an innovative effort aimed at making financial transactions more accessible and efficient for all Indian citizens. Fundamentally, the AEPS service lets individuals do bank transactions with the use of their fingerprint authentication and Aadhaar number. This technique effectively converts Aadhaar into a virtual debit card, eliminating the need for physical cards and PINs.

How does the AEPS service work?

Make sure that your Aadhaar Card is linked with your bank account to make use of the AEPS facility. The next steps are as follows:

  1. Visit a nearby banking correspondent.
  2. Enter the Aadhaar number into the Point of Sale (PoS) machine.
  3. Choose the transaction type and the bank's name.
  4. Enter the transaction amount to proceed with the transaction.
  5. Confirm the payment by providing biometric authentication (fingerprint or iris scan).
  6. Once the transaction is successfully completed, a receipt will be issued.

Benefits of the Aadhaar Enabled Payment System

  • Financial inclusion
    One of the primary benefits of AEPS is its contribution to financial inclusion. AEPS delivers financial services to individuals who live in remote or underdeveloped locations by allowing them to conduct transactions using only their Aadhaar number and fingerprints. This ensures that individuals without access to traditional financial infrastructure can participate in the digital economy.
  • Enhanced security
    AEPS uses biometric authentication to increase transaction security. Fingerprint authentication provides an additional layer of security, reducing the risks associated with older techniques such as card-based transactions. This enhanced security feature boosts the customer's confidence, encouraging them to use digital payment methods.
    A receipt is sent once the transaction has been completed successfully.
  • Convenience and accessibility
    AEPS is designed with simplicity in mind, ensuring that even those with limited technical knowledge can use the system effortlessly. By eliminating the need for physical cards and PINs, AEPS simplifies the transaction process and makes it more accessible to a wide variety of customers. The convenience that AEPS provides is the primary factor driving its widespread adoption.
  • Cost-effective
    AEPS transactions are cost-effective for both users and service providers. With minimal infrastructure requirements, financial institutions can extend their services to remote areas without incurring substantial expenses. This cost-effectiveness results in lower transaction fees, making AEPS an affordable option for individuals and enterprises.

The Aadhaar Enabled Payment System represents a significant leap forward in the realm of digital financial transactions. The continued growth of AEPS is not only changing the way transactions are conducted but is also contributing to the larger goal of financial inclusion, enabling every Indian citizen to participate in the digital economy.

Utilise the easy access to crucial documents like the Aadhaar card. The Aadhaar card comes in handy during emergency expenses. You would need a copy of the Aadhaar card to serve as your KYC document when applying for a personal loan. Read about the documents required for a personal loan from Bajaj Finance.

Disclaimer

While care is taken to update the information, products, and services included in or available on our website and related platforms/ websites, there may be inadvertent inaccuracies or typographical errors or delays in updating the information. The material contained in this site, and on associated web pages, is for reference and general information purpose and the details mentioned in the respective product/ service document shall prevail in case of any inconsistency. Subscribers and users should seek professional advice before acting on the basis of the information contained herein. Please take an informed decision with respect to any product or service after going through the relevant product/ service document and applicable terms and conditions. In case any inconsistencies are observed, please click on reach us.

*Terms and conditions apply

Frequently asked questions

How do I enable AEPS service?

To enable AEPS (Aadhaar-enabled Payment System) service, contact your bank or financial institution and follow their instructions for registration and activation.

Who launched the Aadhaar-enabled payment system?

The Aadhaar-enabled Payment System (AEPS) was launched by the National Payments Corporation of India (NPCI) to facilitate financial transactions using Aadhaar authentication.

Is AePS safe to use?

Yes, AePS is considered safe to use as it employs Aadhaar authentication, biometric verification, and secure banking protocols to ensure the security and integrity of transactions.

What if AePS is disabled?

If AePS is disabled, contact your bank or the service provider for assistance. Reasons for disabling could include technical issues, security concerns, or account-related issues.

Are AEPS and UPI the same?

No, AEPS (Aadhaar-enabled Payment System) and UPI (Unified Payments Interface) are different payment systems. AEPS uses Aadhaar authentication, while UPI enables real-time payments between bank accounts using a virtual payment address (VPA).

Does AEPS require OTP?

No, AEPS transactions typically do not require OTP (One-Time Password). Instead, they rely on biometric authentication using fingerprints or iris scans linked to Aadhaar for secure verification.

Show More Show Less