Every Indian citizen knows about the Aadhaar number, which is a 12-digit unique identification number that is assigned to each person, whether they are children or infants. This number is helpful for the universal identification of each individual across the country based on biometric and demographic details. Aadhaar cards can be helpful in various procedures besides providing identification; now, you can use the Aadhaar Enabled Payment System, which can be useful for people of different financial and literacy backgrounds. Various benefits come along with it.
This article will provide you with all the necessary information about Aadhaar Enabled Payment System and its benefits:
About Aadhaar Enabled Payment System
The Aadhaar Enabled Payment System (AEPS), including AEPS cash withdrawal, is a digital payment system developed by the NPCI, overseeing digital transactions. AEPS facilitates financial transactions through Aadhaar-based authentication. This system relies on the Aadhaar number, enabling cardholders to initiate and complete transactions with ease. AEPS promotes financial inclusion by making banking and financial services accessible to people from all walks of life through the Aadhaar platform.
Objectives of the Aadhaar Enabled Payment System
Let's look at the Aadhaar Enabled Payment System services objectives:
- Empower bank customers to use their Aadhaar identity for accessing their Aadhaar-linked bank accounts and conducting basic banking transactions, including cash deposits, cash withdrawals, intrabank or interbank fund transfers, balance inquiries, and obtaining mini statements through a Business Correspondent.
- Contribute to the Government of India (GoI) and Reserve Bank of India's (RBI) mission to promote financial inclusion.
- Support RBI's goal of digitizing retail payments.
- Enable banks to process Aadhaar-initiated interbank transactions through a centralized switching and clearing agency.
- Facilitate the disbursement of government entitlements such as NREGA, Social Security pension, Handicapped Old Age Pension, and others by leveraging Aadhaar and UIDAI-supported authentication.
- Promote secure interoperability among banks.
- Lay the groundwork for a comprehensive range of Aadhaar-enabled banking services.
Features of AEPS
The Aadhaar Enabled Payment System facility has the following characteristics:
- Direct Account Deduction: Transaction amounts are deducted directly from the user's Aadhaar-linked bank account, ensuring a smooth process.
- Basic Banking Functions: AEPS allows Aadhaar cardholders to execute various fundamental banking operations. These include making cash deposits, performing interbank and intrabank fund transfers, withdrawing cash, checking balances, and obtaining Mini Bank statements. These transactions are typically facilitated through a banking correspondent.
Benefits of AEPS
Let's look at the range of benefits the Aadhaar Enabled Payment System offers :
- AEPS is user-friendly, ensuring individuals can easily learn and use the system for various financial transactions.
- The system mandates the provision of biometric information (such as fingerprints or iris scans) and the Aadhaar card number for authentication, guaranteeing secure transactions.
- AEPS is pivotal in empowering marginalized sections of society by granting them access to banking services and enabling digital financial transactions.
- The users can make transactions without revealing their bank account details, ensuring privacy is kept.
- AEPS allows users to access their bank accounts through Aadhaar authentication, eliminating physical visits to the bank.
- Including biometric data and Aadhaar numbers adds a layer of security to AEPS transactions, making them secure and dependable.
- AEPS helps deploy micro Point of Sale (PoS) devices in remote villages, ensuring that users in these regions can access transactions.
How to Use AEPS?
To make use of the Aadhaar Enabled Payment System facility, an individual holding an Aadhaar card linked to their bank account can follow these simple steps:
- Pay a visit to a nearby banking correspondent.
- Input the Aadhaar number into the Point of Sale (PoS) machine.
- Choose the type of transaction and specify the bank's name.
- Enter the preferred transaction amount to proceed.
- Provide your biometric authentication to confirm your payment.
- A receipt of the transaction is issued after you have completed the authentication.
Withdrawal Process for AEPS Cash
The AEPS cash withdrawal process is similar to using a POS machine. Instead of requiring a debit/credit card PIN, the retailer inputs the customer's Aadhaar number and validates the transaction using the customer's biometric data.
To conduct an AEPS transaction, you will need the following information:
- IIN (Issuer Identification Number) or the Bank's Identification Number
- The Aadhaar Number of the customer.
- Fingerprint or other biometric information
- A Micro ATM
- Utilization of the Assisted Mode
AEPS Transaction Charges
As a customer, there are no charges for Aadhaar Enabled Payment System transactions, and you are not obliged to pay anything to use this service. However, the Merchant or Banking Correspondent may incur charges or receive compensation, depending on the bank's policies. The transaction costs are categorised as follows:
- The UIDAI levies a nominal fee.
- The NPCI imposes a settlement fee ranging from 15 to 25 paise.
- Banks may levy charges up to 1% of the total transaction value, with minimum and maximum fees set at INR 5 and INR 15, respectively.
AEPS Transaction Limits
While the RBI sets a standard limit for Aadhaar Enabled Payment System transactions, individual banks can establish limits. Many banks have instituted transaction limits to prevent misuse or unauthorized access. Rs 50,000 has been set as the daily limit per person by many banks, and these limits can differ depending on the bank.
Things to Keep in Mind in AEPS
Let's look at various factors and things to keep in mind while using Aadhaar Enabled Payment System :
- No OTP or PIN is needed to conduct transactions via this method.
- Confirm that your bank account is linked to your Aadhaar if you want to utilize this service.
- In cases where you have multiple accounts with a bank, AEPS transactions will exclusively involve your primary account.
- AEPS allows transactions only between Aadhaar-linked bank accounts, not unlinked ones.
- It's necessary to link multiple bank accounts to Aadhaar to access this service. However, you can use only one account per bank with AEPS.
- The daily transaction cut-off time for AEPS is 11 p.m. IST, with transactions completed before this time included in the day's settlement.
Conclusion
Aadhaar Card can be deemed more useful than providing identification; it can used in making transactions or withdrawing cash. The process is simple, safe, and secure. The objective of the Aadhaar Enabled Payment System is to enable people to make bank-related tasks easily and by people of all backgrounds and to support RBI's goal of digitizing payments. Keep important things in consideration before using AEPS.