Aadhaar Enabled Payment System: All You Need to Know

Aadhaar-enabled payment system or simply AePS is a digital payment platform developed by the National Payments Corporation of India (NPCI). It enables secure monetary transactions through Aadhaar-based authentication.

With AePS, Aadhaar card holders in India can carry out financial transactions such as cash withdrawals, balance inquiries, and fund transfers, using Aadhaar numbers and biometric verification. Read this article to learn about AePS in detail and understand its features, benefits, and usage.

What is the AePS?

Aadhaar-enabled Payment System (AePS) is an initiative by the Indian government, to make financial transactions easier, especially for people in remote and rural areas. AePS uses Aadhaar-based authentication, like fingerprints or iris scans and allows cardholders to carry out banking transactions without debit cards and PINs.

People can perform transactions such as withdrawals, deposits, fund transfers and balance enquiries using micro ATMs. To use this service, Aadhaar card holders must link their Aadhaar number to their bank account, ensuring seamless and hassle-free banking access.

Why was the Aadhaar Enabled Payment System Introduced?

Below are the most important reasons why the Indian government introduced AePS:

• AePS supports the Reserve Bank of India (RBI) and the central government’s vision of providing banking access to all.
• With this initiative, RBI can meet the digitisation of retail payment goals.
• This initiative helps seamless and secure transactions across different banks
• This establishes the ground for an Aadhaar-enabled banking system.
• The system allows the Indian government to disburse schemes like social security pensions and NREGA seamlessly.

How to Transact Using an Aadhaar-Enabled Payment System?

If your Aadhaar Card is linked to your bank account, follow the steps below for banking transactions:

Step 1: Visit any AePS-enabled outlets or business correspondents to carry out transactions.

Step 2: Select the desired transaction type, such as an AePS cash withdrawal, fund transfer, or balance enquiry.

Step 3: The system will verify your Aadhaar details and biometric information, and your transaction will be processed.

What are the Benefits of AePS?

Below are some of the most essential benefits Aadhaar Card holders can enjoy with AePS transactions:

1. Easy Access: AePS is user-friendly, meaning it is designed to be accessible to everyone. It ensures simple and convenient banking transactions.
2. Privacy of Bank Accounts: Aadhaar-enabled payment system follows the safety and privacy features set by the banks. Whenever you carry out any transaction, it processes the request without bank details or physical cards.
3. Aadhaar and Biometric Verification: Every transaction requires Aadhaar-based biometric verification (fingerprint or iris scan), adding an extra layer of security.
4. No Need to Visit Banks for AePS Transactions: The AePS services remove the requirement to visit a banking branch physically. You can perform transactions like AePS balance inquiries and withdrawals from micro ATMs or business correspondents.
5. Empowerment of the Underprivileged: AePS allows underprivileged communities in India to get easy access to essential banking services. By providing digital financial services, it fosters financial inclusion.

Services Provided by Aadhaar Enabled Payment System

Here are the different services provided by AePS other than deposit, withdrawal and balance enquiry:

1. Mini Bank Statements: AePS users can request banking services like generating mini statements. It enables you to get a receipt of your recent banking transaction to manage your finances.
2. BHIM Aadhaar Pay: One can make digital payments using BHIM Aadhaar at merchant stores through AePS.
3. Aadhaar to Aadhaar Money Transfer: This is another feature of AePS, and it allows the transfer of money from one Aadhaar-linked bank to another Aadhaar-linked bank.
4. Other Services: AePS also offers a few other services apart from financial facilities. These services include e-KYC, Aadhaar seeding status and Tokenisation.

AePS Service Charge and Transaction Limit

The Aadhaar-enabled payment system (AePS) comes with specific charges and transaction limits, which vary based on banking policies. Below are the key details:

• As per the policies of UIDAI, there are no applicable charges for cash withdrawals.
• In case of a fund transfer, a bank might charge 1% of the amount as a fee for a transaction, with a minimum fee of ₹5 and a maximum of ₹15 per transaction.
• Most banks have set a transaction limit of ₹50,000 per day.
• The maximum cash withdrawal limit is ₹10,000, as stated by NPCI.

Important Points to Remember Before Using AePS

Here are a few points you should remember before transacting using AePS:

• You do not need an OTP or PIN to complete any financial transaction.
• Your bank account must be connected with your Aadhaar number for seamless transactions.
• If you have multiple accounts at a bank, only the main account will be used by AePS.
• With AePS, fund transfers can only be done between Aadhaar-linked bank accounts. Transactions cannot be made to or from bank accounts that are not linked to Aadhaar.
• You can link multiple accounts with Aadhaar, but the Aadhaar-enabled payment system will use one account per bank.
• The transaction cutoff time for AePS is 11 PM in Indian Standard Time. Transactions before 11 PM are included in that day's settlement.

Final Word

Aadhaar-enabled payment service is a government initiative to make financial transactions more accessible and convenient. Unlike ATMs, you can withdraw cash and transfer funds to other Aadhaar-linked accounts without any PIN or physical card. 

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