The Aadhaar biometric authentication technology is used to make payments in Aadhaar-based payment systems (AePS), a type of digital payment system. The Unique Identification Authority of India has created the 12-digit unique identity number known as Aadhaar (UIDAI). For the objective of allowing financial transactions, the AePS system makes use of the Aadhaar authentication infrastructure. It is built on the platform for the Unified Payment Interface (UPI).
AePS is a model developed by NPCI under the direction of the bank. It allows for online transactions via Micro ATMs, Kiosks, and mobile devices using Aadhaar authentication through authorised Business Correspondents (BC) of any bank.
Benefits of the Aadhaar-based Payment System (AePS)
Aadhaar-linked account holders can seek virtual services, therefore NPCI has created an Aadhaar-based Payment System that acts as an authenticating gateway to meet their needs. Those who have Aadhaar numbers linked to a bank account, commonly known as an Aadhaar Enabled Bank Account, are eligible to use the AePS service (AEBA). Customers must set up an AEBA with a recognised bank and have a valid Aadhaar number in order to use the AePS service.
Basic banking operations including balance enquiries, cash withdrawals, and remittances are made easier by AePS when done through a Business Correspondent.
List of services available under AePS
Balance Enquiry
Cash Withdrawal
Cash Deposit
Aadhaar to Aadhaar funds transfer
Payment Transactions (C2B, C2G Transactions)
Step-by-Step Guide for Customers to Conduct an AePS Transaction
Aadhaar Number
Bank Name
Biometric captured during their enrollment
Transaction Type (If needed)
Aadhaar-Based Payment System Benefits
Customers don’t need to go to a bank branch, carry cash, or remember PINs or passwords in order to take advantage of doorstep banking and conduct simple financial transactions from the comfort of their homes.
By allowing the merchant to accept the customer’s biometrics and Aadhaar number/Virtual ID for the purpose of making a purchase of goods and services, it also facilitates merchant transactions.
