AADHAR-ENABLED PAYMENT SYSTEM (AePS)
1. Context
As more frauds related to the Aadhaar-enabled Payment System (AePS) come to the fore, the Unique Identification Authority of India (UIDAI), has turned to artificial intelligence-based systems in a bid to limit the cases — this includes developing technologies around fingerprinting and facial recognition
2. What is AePS?
- Aadhaar-enabled Payment Services (AePS) is a bank-led model which allows online financial transactions at Point-of-Sale (PoS) and Micro ATMs through the business correspondent of any bank using Aadhaar authentication
- The model removes the need for OTPs, bank account details, and other financial details. It allows fund transfers using only the bank name, Aadhaar number, and fingerprint captured during Aadhaar enrolment, according to the National Payments Corporation of India (NCPI)
- For AePs, these are the only inputs required for certain types of transactions, including cash deposit, cash withdrawal, balance inquiry, mini statement, Aadhaar to Aadhaar fund transfer, authentication, and BHIM Aadhaar pay
- AEPS is a bank-led model which allows online interoperable financial transactions at PoS (Point of Sale / Micro ATM) through the Business Correspondent (BC)/Bank Mitra of any bank using the Aadhaar authentication
3.AePS Transactions
Neither the Unique Identification Authority of India (UIDAI) nor the National Payments Corporation of India (NPCI) explicitly mentions whether AePS transactions are enabled by default. However, many experts claim that the service does not require any activation.
Here are some reasons why experts believe that AePS transactions are enabled by default:
- Aadhaar is the preferred method of KYC for banking institutions. This means that most bank account holders will already have their Aadhaar number linked to their bank account.
- AePS is a government-backed initiative. This means that it is unlikely that the government would require users to activate AePS before they can use it.
- AePS is a convenient and secure way to make financial transactions. This means that there is no reason why users would want to disable it.
4. Services offered by AePS
There are various services offered by AEPS, such as:
Balance Enquiry
Cash Withdrawal
Cash Deposit
Aadhaar to Aadhaar funds transfer
Payment Transactions (C2B, C2G Transactions)
Source: The Hindu
