New Delhi, Aadhaar Enabled Payment System (AEPS): Inching towards a comprehensive digital India, A digital India which really kicked of a better start after 8th November after Modi announced demonetisation of Rs 1000 and 500. Demonetisation has done one important thing; it has pushed people to start use other sources to do their payments. Enabling AEPS will surely help in easy and faster way for cashless transaction.


Reluctant Consumers, buyers and sellers

Earlier in the card payment of money transactions, most of the people were reluctant to use it, as tax was put on the transaction done through the cards.  The government will not levy any additional charges on merchants using the Aadhaar-based payment solutions. This will surely boost the cashless transaction.

What is Aadhaar Enabled Payment System

The Aadhaar Enabled Payment System (AEPS) is a system through which based on your Aadhar number you can do your bank basic activities like your payments becomes totally easy. For this you have to go to your respective bank and enroll your Aadhaar number to your bank account. After this you can do every transaction like money transfer, money withdrawal, payment from one Aadhaar number account to another bank can be done easily if your Aadhaar is linked to the bank.

Mgnrega and other money transfer will go directly into your account, no cash given by hand.

As per numbers released by the government recently, around 40 crore Aadhaar numbers have already been linked with bank accounts, still a long way to go for enrolling this number, however the government expects this to be done by March, 2017.


This AEPS APP based payment system will also help to do away with the plastic money (credit / debit cards), PINs, passwords and point of sales machines (POS). The app has been developed by IDFC Bank along with National Payments Corporation of India (NCPI) and UIDAI.

The AEPS based payment system will eliminate the Paytm, Freecharge or any other payments methods used currently by private companies, as you do not need a smart phone to do any transaction. This will boost the consumers and sellers confidence.  AEPS App is basically aimed at merchants, which will enable them to accept cashless transactions.

The Aadhaar card has a wider reach, not only in metro cities, rural areas and villages and many of these places, especially the villages and many of the people might not be willing to use android based methods to do payments and many will not be having android based latest phones to have all this android based applications.  The AEPS will be a huge help in achieving the cashless transaction without a phone.

How Aadhaar enabled payment system works for Merchants?

  1. Merchants need an Android Smartphone, the AEPS APP app and a biometric reader, cost around Rs 2,000.
  2. After this Merchants need to enter their Aadhaar card number, while running the app for the first time.
  3. Select the bank and validate their fingerprint.
  4. When accepting payments from customer, merchants need to enter customer’s Aadhaar card number and bank name, followed by amount.
  5. The payment takes place after the biometric scan, which also works as a password.
  6. Once the authorization is successful, the payment will be transferred from customer’s bank account to merchant’s bank account.

Is it not simple and easy for merchants?

How Aadhaar enabled payment system works and helps customers

  1. This can be used in banks while deposits, withdrawals and any other banking activities using your fingerprint scan; you only need to use your fingerprint scan.
  2. It will become easy to transfer funds to your family or friends account using AEPS.
  3. Customers need to provide his/her Aadhaar number; details of financial transaction sought and fingerprint impression at the microATM device.
  4. Enter your Aadhaar number on the PoS machine and scan your fingerprint, enter the recipient’s Aadhaar card number followed by amount and validate the transaction with your fingerprint.
  5. The money will be transferred from your account to the recipient’s account, if the authentication response is yes. As the Aadhaar payment bridge uses Immediate Payment Service (IMPS) service, the funds are transferred instantly. If the transfer is not validated bank carries out the required authorization process and advises microATM on suitable next steps.
  6. It works 365 days of a Year.

Truly the Digital India is taking a shape and Narendra Modi the dreamer has given his dream to all of India, said a technical person working in a MNC. This will help black money and other illegal money transfer activities, theft and many other problems from the society. No more Paytm Karo…

About The Author

Pravin Pathak is an Indian fact-checker and news writer, writing news for Ayupp since 2014.

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