Aadhaar Enabled Payment System (AEPS) is a payment system that allows customers to make transactions using their Aadhaar numbers and fingerprint.
This system was launched by the Indian government in order to make digital payments more secure and convenient for Indian citizens. In this blog post, we will discuss the benefits of AEPS for both merchants and customers in India.
AEPS is a payment system that uses the 12-digit unique identification number (UID) – Aadhaar – as an authentication tool. This system enables customers to use their fingerprint or iris scan to make cashless transactions at merchant outlets.
UIDAI, the agency responsible for issuing Aadhaar numbers, has authorized banks to use this number for authentication purposes.
Various financial institutions and fintech solutions companies offer this service
AEPS is a bank-led model which allows customers to use their Aadhaar numbers and biometrics to authenticate themselves and conduct financial transactions at PoS (Point of Sale/micro-ATMs) terminals.
The customer’s bank account is linked to their Aadhaar number. The authentication is done through the iris or fingerprint scan. Once the customer is successfully authenticated, they can conduct financial transactions like cash withdrawal, balance inquiry, and fund transfer.
In this way, AEPS provides a simple, convenient, and secure way for customers to access their bank accounts and conduct financial transactions.
This is especially beneficial for those who live in rural areas or do not have access to smartphones and the internet. It also eliminates the need for customers to carry cash or cards with them.
AEPS has already started gaining traction in India. In March 2018, the Reserve Bank of India (RBI) reported that there were over 270 million transactions worth Rs. 145 billion conducted through AEPS in the previous month.
This is a significant increase from the Rs. 34 billion worth of transactions were conducted in November 2016.
The benefits of AEPS for Indian merchants are many. Perhaps the most obvious is that it provides them with a more secure way to accept payments.
- With AEPS, there is no need to worry about losing cash or having it stolen.
- AEPS is much faster than traditional methods of payment such as cheques or Demand Drafts (DDs). This means that merchants can get their hands on their money much sooner, which is always a bonus.
- Another big advantage of AEPS for merchants is that it allows them to accept payments from customers who do not have a bank account.
- This is particularly useful for small businesses that may have difficulty getting people to open bank accounts in the first place.
- AEPS means that they can still accept payments from these customers and, as a result, boost their sales.
- By accepting AEPS payments, they can tap into a larger customer base
- Merchants also don’t need to invest in expensive PoS terminals or acquire a merchant discount rate (MDR).
There are many benefits of AEPS for Indian customers. For example, customers can use their Aadhaar number to make payments at any AEPS enabled bank or financial institution.
- This makes it easier for customers to make payments without having to carry cash or cards.
- AEPS is a more secure way of making payments as it uses biometric authentication. This means that only the customer can authorize a payment, which reduces the risk of fraud.
- Another benefit of AEPS is that it can be used to make payments in rural areas.
- AEPS does not require an internet connection, which means that it can be used even in places where there is no mobile or data coverage.
- This is especially beneficial for small businesses and farmers who are located in rural areas.
Aadhaar enabled payment system or Aeps is a new way of making digital payments in India. It is based on the Indian government’s unique identification project, Aadhaar. The main aim of this system is to provide a more secure and convenient way of making digital payments in India.
Aeps is also beneficial for the Indian economy as a whole. It helps in reducing the cash in circulation, which is one of the main aims of the Indian government. Aeps also helps in increasing digital transactions and promoting financial inclusion.
It is helping in bridging the financial gap by providing financial assistance in rural areas. Rural people are able to develop and do business in a convenient way. This ultimately contributes to the economic growth of the country.
Aadhaar enabled payment system or AEPS can be used by any customer who has a valid Aadhaar number and a mobile phone.
The customer needs to go to an AEPS point of sale (POS) machine and select the ‘Aadhaar Payment’ option. The customer then needs to enter their 12-digit Aadhaar number and select their bank.
The POS machine will then generate a one-time password (OTP), which the customer needs to enter in order to complete the transaction.