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What is AePS: Aadhaar Enabled Payment System


The AePS, also known as the Aadhaar Enabled Payment System, is a bank-led payment system that enables all Aadhaar card users to conduct financial transactions via micro ATMs or point of sale (POS) by utilising a special identification number (UID).

This initiative was taken by the National Payment Corporation of India (NPCI) to encourage cashless transactions in India. Their primary goal was to provide everyone in the community permission to use Aadhaar to access banking and financial services. Users can transfer money, make cash deposits and withdrawals, check their account balance, and access additional functions through the AePS.

In this blog, we’ll talk in-depth about AePS, including its benefits, objectives, how to use it, and more.

What is AePS?    

AePS stands for Aadhaar Enabled Payment System. The Indian government’s National Payments Corporation created it. The Reserve Bank of India (RBI) and the Government of India want to make it easier for customers to use a business correspondent to conduct banking and financial services including fund transfers, cash withdrawals, mini statements, balance enquiries, and other tasks. To do this, they’ve made it possible for Aadhaar-originated interbank transactions through centralised switching and clearing businesses. To use the AePS service on a micro-ATM, customers just need to provide their biometric data and an Aadhaar number.

AePS is used by any State or Central government entities employing Aadhaar to streamline payments for government programmes like social security pension, handicapped old age pension, National Rural Employment Guarantee Act (NREGA), etc.

The specifics of AePS are as follows:

  • Users can transfer money between bank accounts via AePS.
  • AePS transactions are safe and secure since users are required to provide biometric information to complete the transaction.
  • AePS is a system that enables Aadhaar card holders to conduct transactions through a bank account that is connected to their Aadhaar like that of a debit or credit card transaction.
  • To finish the transaction at a Point of Sale (PoS) or a micro ATM using Aadhaar authentication, the Aadhaar card number and biometric information from the card must be entered.
  • The biometric data may consist of an iris or fingerprint scans.
  • Consumers are not required to enter their bank account information to complete the transaction.

What is the requirement to use the AePS facility?

The following prerequisites must be met to use the AePS facility:

  • The bank account should be linked to an Aadhaar card.
  • Aadhaar Number
  • Biometric information of the Aadhaar card holder.
  • A micro ATM

Features and Benefits of Aadhaar Enabled Payment System

The following are the benefits of the AePS, or Aadhaar Enabled payment system, for all societal segments:

  • The Aadhaar-enabled payment mechanism is simple to use.
  • It requires the entry of biometric information in addition to the Aadhaar card number.
  • It gives the underprivileged group in society more power.
  • Users are not required to provide bank information to complete a transaction.
  • Users are now able to quickly and easily access their bank accounts because of Aadhaar authentication’s widespread adoption.
  • An Aadhaar card user can use the method to carry out standard banking operations like cash deposits, intrabank to interbank fund transfers, cash withdrawals, balance inquiries, and getting a mini bank statement via a banking correspondent.
  • Using AePS is completely safe because it requires both biometric data and an Aadhaar number.
  • Mini Point-of-Sale machines are small enough to be carried to remote areas, simplifying transactions for customers there.

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Objectives of the Aadhaar Enabled Payment System or AePS

The Aadhaar Enabled Payment System, often known as AePS, was created primarily to advance the digital India movement and promote more cashless transactions. Together with these, the Aadhaar Enabled Payment System’s (AePS) further objectives include the following:

  • To encourage bank customers to use Aadhaar as his/her identification to access his/her Aadhaar-enabled bank account and undertake basic banking operations such as cash deposits, cash withdrawals, Intrabank or interbank fund transfers, balance enquiry, and acquire a mini statement via a Business Correspondent.
  • To promote the financial inclusion goal of the Government of India (GoI) and Reserve Bank of India (RBI).
  • To promote the RBI’s initiative towards the electronification of retail payments.
  • ln order to give banks the option of routing Aadhaar-initiated interbank transactions through a centralised switching and clearing organisation.
  • To make it easier for any Central or State Government organisations to pay out government benefits like NREGA, Social Security pensions, Disabled Old Age Pensions, etc. by using Aadhaar and its UIDAI-supported authentication.
  • To promote interoperability between banks safely and securely.
  • To lay the groundwork for a comprehensive variety of Aadhaar-enabled banking services.

What services do AePS offer?

1. Banking services provided by AePS

  • Cash deposit
  • Cash withdrawal
  • Balance Iinquiry
  • MinisStatement
  • Aadhaar to Aadhaar money transfer
  • Authentication
  • Aadhaar pay using BHIM

2. Other services provided by AePS

  • eKYC
  • Best finger detection
  • Demo auth
  • Tokenization
  • Status of Aadhaar seeding

How to use AePS?

For those who have their Aadhaar cards and bank accounts linked, AePS makes it easy and quick to make transactions. Everyone can do it; all they have to do is adhere to the guidelines:

  • Visit your neighbourhood banking correspondent
  • Input your Aadhaar number into the PoS machine.
  • Choose the kind of transaction and enter the financial institution’s name.
  • To finish the transaction, enter the transaction amount.
  • Then, you’ll need to provide your fingerprints or other biometrics so the transaction may be verified.
  • Upon completion of the transaction, a receipt will be provided.

Note: A banking correspondent is an agent chosen by the bank to offer banking services where there is no branch of the bank.

How does AePS work?

Just remembering your 12-digit Aadhaar number will grant you the necessary banking services. Your bank account is linked to your Aadhaar number. To authenticate a transaction or use an AePS function, you must use your fingerprint, which is linked to your Aadhaar. The bank will only complete your transaction if the UIDAI authenticates your fingerprint. Let’s say a man introduces himself as X and displays the Aadhaar number linked to X’s name. X wants to make a transaction to pay for his purchases from a merchant. He must therefore submit his fingerprint to confirm the transaction; if the fingerprints match, the bank will carry out the transaction. As a result, numerous facilitators are active at any given time: –

  • An individual who wants to carry out the transaction.
  • The middleman (merchants/store owners) or banking partner you want to use to carry out the transaction
  • Aadhaar-enabled bank.
  • For fingerprint authentication, UIDAI.
  • For transaction settlement, NPCI.


Reasons to use AePS 

To start a transaction using AePS, a bank holder simply needs to enter their Aadhaar number and biometric data. It also permits retailers to simplify transactions through Aadhaar-based biometric verification and to accept the Aadhaar number, the Virtual ID, and the consumer’s biometrics for the purchase of products and services.

Important justifications for choosing AePS include:

  • Simple to use.
  • A secure and reliable payment method.
  • Interoperability between multiple banks


Aadhaar authentication has only a few prerequisites for utilising AePS services. Iris, Fingerprint, and Face Recognition are all examples of Biometric Matching. In addition to demographic matching, a one-time password is also implemented. Linking your Aadhaar card to your bank account is the most convenient and efficient way to use the AePS services.

When using the AePS facility, keep the following in mind:

  • To use the AePS service, a bank account must be linked with an Aadhaar number.
  • PIN or OTP is required for transaction completion.
  • If multiple accounts are linked to Aadhaar, only the primary account can be used to complete transactions.
  • This service is only available for bank accounts linked to Aadhaar.


1. What is AePS cash withdrawal?

Ans: Aadhaar Enabled Payment System is a cash withdrawal facility, commonly known as Aadhaar ATM. It enables individuals to withdraw cash from their bank accounts linked to their Aadhaar using their Aadhaar number and fingerprint. People who reside in areas where banks and ATMs are unavailable utilise the Aadhaar ATM service. A provider of AePS services offers cash withdrawal services to those who lack access to cash withdrawal facilities in their location. 

The Aadhaar Enabled Payment System is a National Payments Corporation of India-supported service that facilitates Aadhaar Cash Withdrawal throughout India.

2. What is the AePS cash withdrawal limit?

Ans: The maximum amount of money that can be exchanged in a single AePS financial transaction is Rs. 10,000, as determined by the National Payments Corporation of India.

3. What is the AePS funds transfer limit?

Ans: There are no limits on AePS transactions imposed by the RBI. However, some banks have placed a daily transaction limit of Rs. 50,000.

4. What is the full form of AePS in banking?

Ans: In banking, AePS stands for Aadhaar Enabled Payment System. It is an Indian payment system that uses Aadhaar authentication to enable interoperable online financial transactions at Micro ATM or Point of Sale (PoS) terminals through any bank’s Business Correspondent (BC).

5. Is AePS safe to use?

Ans: Absolutely, AePS is secure since Aadhaar cardholders must provide their Aadhaar number and biometric information to complete a transaction.

6. Is linking a bank account to an Aadhaar card mandatory?

Ans: Yes, linking a bank account to an Aadhaar card is required because the transaction will be processed via the associated bank account.

7. How to stop AePS cash withdrawal?  

Ans: It is not required to link your Aadhaar to a bank account, but you must have Aadhaar linked to your bank account to receive a government-issued (DBT) Direct Benefit Transfer. Keep Aadhaar linked to a single bank account and request Aadhaar delinking for accounts from which you do not wish to conduct AEPS transactions. Additionally, if you use Net Banking, you may find this option on your Net Banking Dashboard.

8. How do AePS work?

Ans: Just remembering your 12-digit Aadhaar number will grant you the necessary banking services. Your bank account is linked to your Aadhaar number. To authenticate a transaction or use an AePS function, you must use your fingerprint, which is linked to your Aadhaar. Also, the bank will only complete your transaction if the UIDAI authenticates your fingerprint.

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