What is AEPS (Aadhaar Enabled Payment System)

AEPS stands for Aadhaar Enabled Payment System. It is an Indian government initiative that enables individuals to carry out financial transactions using their Aadhaar number and biometric authentication. Aadhaar is a 12-digit unique identification number issued to Indian residents by the Unique Identification Authority of India (UIDAI).

The AEPS system allows individuals to access basic banking services such as cash withdrawals, balance inquiries, and fund transfers through micro-ATMs. These micro-ATMs are operated by business correspondents (BCs) who are authorized agents of the banks. BCs are appointed to provide banking services in areas where traditional banking infrastructure is limited.

To use AEPS, individuals need to link their Aadhaar number to their bank account. They can then visit a micro-ATM and authenticate themselves using their Aadhaar number and biometric information such as fingerprints or iris scans. The biometric authentication ensures the security and accuracy of transactions.

AEPS has been instrumental in promoting financial inclusion in India by bringing banking services to remote areas and to people who may not have traditional identification documents. It has helped individuals, particularly those in rural areas, to access banking services and conduct transactions easily, without the need for physical bank branches.