Aadhaar Enabled Payment System (AEPS) And Financial Inclusion
Financial discrimination has always been part of Indian society. There are several households and individuals in India belonging to the underprivileged sections who do not have access even to the financial services that are basic. Lack of proper income and savings, illiteracy and lack of knowledge regarding finance are some of the reasons that have contributed towards these situations. They do not have access to credit facilities offered by the banks/ NBFCs and have to rely on informal and unorganized forms of credit. As a result, there are many who get cheated by the upper-class sections.
What Is Aadhaar Enabled Payment System (AEPS)?
The AEPS works by facilitating financial inclusion through the Micro ATMs that are set up and using the process of Aadhaar authentication. AEPS or the Aadhaar Based Payment System uses the 12 digits unique identification number on the Aadhaar card for carrying out various financial transactions. Aadhaar cardholders can make financial transactions easily through the process of Aadhaar authentication.
The Unique Identification Authority of India is now working along with the Reserve Bank of India and the NPCI or the National Payments Corporation of India to give the marginalized sections of India access to banking and other financial services. The AEPS acts as a platform to the economically underprivileged-
- By giving access to financial facilities and banking using micro ATMs through Aadhaar verification.
- The Individual has to provide their Aadhaar number at the micro ATM or the POS (Point of Sale).
- This system of payments encourages cashless transactions.
- All financial transactions can be carried out using this micro ATM or through a bank correspondent.
- However, the Aadhaar card of the individual has to be linked to their bank accounts.
AEPS Services
The following are some of the services given by AEPS
- Cash deposits and cash withdrawal.
- To enquire about balance.
- Financial transactions.
- Transfer of funds (Aadhaar to Aadhaar).
Working Of AEPS Is As Follows
- Go to a banking correspondent or a micro ATM.
- Submit the details of Aadhaar e-KYC and the name of the bank.
- Verification using fingerprint/Iris scan.
- Choose the required financial transaction.
- Through a Bank Switch, the digital data submitted is sent to the UIDAI for verification.
- Following the process of authentication, the UIDAI responds with a Yes or No.
- The authorization will be initiated by the bank if the response is ‘Yes’.
- Collect the receipt
How AEPS Helps In Financial Inclusion
The AEPS serves the economically underprivileged sections of the society by encouraging financial inclusion.
- Initiating transactions is much easier as the only information required is the Aadhaar number and biometric details.
- Quite simple and easy to use.
- The payment method is secure and safe and hence avoid getting cheated.
- Access to loans is much easier.
- Lesser chance of getting cheated as the funds reach the beneficiaries directly.
- A lesser amount of paperwork which makes it easier for the illiterate and those who do not have sufficient knowledge.
- AEPS helps in achieving financial empowerment and independence of the underprivileged.
Financial inclusion is a method by which every individual in the society is given access to financial services and banking facilities without any form of discrimination. The main aim is to provide financial solutions that are reliable to those who are underprivileged economically. The AEPS works with the aim to provide financial solutions and banking services to all the sections of the society including the economically underprivileged, using Aadhaar cards.
For more information contact us.
We, Finahub, are experts in Aadhaar related products and services like eSign, eKYC, Authentication, etc. If you want to know how your enterprise can start using it, please give us a call @ 0484 2388285 or email us at [email protected]
