Expanded as Aadhaar Enabled Payment System, AePS, can be used for all banking transactions such as balance enquiry, cash withdrawal, cash deposit, payment transactions, Aadhaar to Aadhaar fund transfers, etc.

It uses the Aadhaar number and biometric fingerprint of the user. AePS financial transactions are performed using Aadhaar enabled POS machines. AePS does not require any OTP or PIN for verification. It depends on data available with the UIDAI CIDR repository, which holds your authenticated data during the Aadhaar enrolment process. AePS performs payment transactions using the Bank Account linked with the Aadhaar Number of the user.

All transactions are carried out through a banking correspondent based on Aadhaar verification. There is no need to physically visit a branch, provide debit or credit cards, or even make a signature on a document. This service can only be availed if your Aadhaar number is registered with the bank where you hold an account. This is another initiative taken by the NPCI to promote digital payments in the country.

How to use AePS

It is very simple to use AePs, all you need to do is to provide the accurate Aadhaar number and the payment will be successfully made to the con-cerned merchant. While using AePS do balance check of your Account, Aadhaar to Aadhaar fund transfer, Cash withdrawal, Cash deposit, Pur-chase at Fair Price Shops with AePS.

  • Go to a micro ATM or banking correspondent
  • Provide Aadhaar number and bank name
  • Choose the type of transaction you want to make
  • Provide verification through fingerprint/iris scan
  • Collect your receipt

A customer will have to register his/her Aadhaar number to their existing bank account, provided their bank is AePS enabled. Through AEPS, the customer can withdraw or deposit cash, make the balance enquiry, and transfer funds. The maximum amount of transaction per account per day is Rs.50, 000.

Threats to AePS

  • Aadhaar enabled pay-ments are built on a plat-form, which is Aadhaar. If any vulnerability effects aadhaar, then Aadhaar enabled payments a pay-ment system which is built on Aadhaar, will also be vulnerable and you may lose money.
  • The Aadhaar Based Pay-ment Systems may be vulnerable to the gum-my finger method. Using gummy finger method your duplicate fingerprint can be made, just by using gum/glue. Fraudsters can make a transaction using your fingerprints and you can lose money. Cloning a debit/credit card is not very easy, but the gum-my finger method where you need just gum/glue, makes Aadhaar Based Payment Systems vulner-able to fraud.
  • The merchant uses the Aadhaar enabled pay-ment system, to authen-ticate your fingerprints. Your biometric data could be stored on this device or the merchant can store your biometric data on his smart phone. This makes you vulnerable to fraud

Best practices for users to remain safe

  • Always verify Aadhaar number before transfer-ring money.
  • Use a Aadhaar ID to car-ryout transactions only at POS and biometric data capture device.
  • Ensure that the devices (POS and Biometric cap-ture machine) are not tam-pered with only certified devices are being used.
  • To secure the biometric data from unauthorized or malicious users who may attempt to access your customers’ private and critical information or manipulate sensitive data to suit their goals to pro-tect financial transactions from fraudsters

AePS gives a lot of convenience to the rural people. It brings the bank to their doorstep and saves much time and transport expense. It would be just like a visit of the ATM at every doorstep. That is why government calls the POS as micro ATM.

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