Aadhaar Enabled Payment System

Aadhaar Enabled Payment System

In a country as populous and diverse as India, digital payments have become an essential part of everyday life. However, the traditional means of digital transactions, such as debit and credit cards, online banking, and e-wallets, are not accessible to everyone. This is where the Aadhaar Enabled Payment System (AEPS) comes in.

What is the Aadhaar Enabled Payment System?

The Aadhaar Enabled Payment System (AEPS) is a payment service that allows customers to make transactions using their Aadhaar card and biometric authentication. Aadhaar is a 12-digit unique identification number issued by the Indian government, which contains the demographic and biometric information of the individual. The biometric information includes fingerprints and iris scans, which are used for authentication purposes.

The AEPS is a revolutionary payment system that enables even those who do not have a bank account or a smartphone to conduct digital transactions. The system is interoperable, which means that customers can use any Aadhaar-enabled bank account to make transactions. This makes it easy for people to access their bank accounts and make payments, no matter where they are.

How does the AEPS work?

The AEPS works on the National Payments Corporation of India’s (NPCI) infrastructure, which is a government-owned entity that operates retail payment systems in India. The system allows customers to make transactions using their Aadhaar number and biometric authentication. The authentication is done through a biometric scanner or a micro ATM, which is a handheld device that can be carried by the banking correspondent to remote locations.

To make a transaction, the customer needs to provide their Aadhaar number and select the type of transaction they want to make, such as cash withdrawal, balance enquiry, or fund transfer. The customer then needs to authenticate the transaction using their fingerprint or iris scan. Once the authentication is successful, the transaction is processed, and a receipt is generated.

Benefits of AEPS

The AEPS has several benefits over traditional payment methods. Firstly, it is more secure, as biometric authentication ensures that only the rightful owner of the Aadhaar card can access the account. Secondly, it is more accessible, as it does not require a smartphone or internet connection. Thirdly, it is more affordable, as there are no charges for using the AEPS service.

The AEPS has also helped to increase financial inclusion in the country. According to the NPCI, there are over 30 crore AEPS transactions every month, with a total value of over Rs. 13,000 crore. The system has enabled people in remote areas and those without a bank account to access financial services, which has helped to reduce poverty and improve livelihoods.


The Aadhaar Enabled Payment System is a game-changer for digital payments in India. It has revolutionized the way people conduct transactions, making it more accessible, affordable, and secure. The system has helped to increase financial inclusion in the country, which has had a positive impact on the economy and people’s livelihoods. With the continued growth of the AEPS, India is well on its way to becoming a cashless society.

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