Aadhaar Enabled Payment System (AEPS): Benefits and Charges


Aadhaar Enabled Payment System is a way to get money from the bank account. This system of getting money neither requires your signature nor Debit card. You don’t even need to visit a bank branch for getting money through the Aadhaar Enabled Payment System. Rather, it uses Aadhaar data for the authentication. Like UPI and USSD, this is another initiative by the NPCI.

Benefits of Aadhaar Enabled Payment System


  • You can perform financial and non-financial transaction through the banking correspondent.
  • A banking correspondent of any bank can do the specified transaction of any bank.
  • There is no need of signature or debit card.
  • It is fast and secure. No one can forge your fingerprint.
  • Banking correspondent can reach to the distant rural place with the micro POS.

Transactions Through the AEPS

The Aadhaar Enabled Payment System gives you banking facility on the go. However, It gives you only basic services. These 4 services can be done through the AEPS.

  1. Balance Check
  2. Cash Deposit
  3. Cash Withdrawal
  4. Aadhaar to Aadhaar Fund Transfer

Except Fund transfer, you can perform all the transactions through the banking correspondent of any bank. For fund transfer, you need the BC of your own bank.

Requirements for AEPS

Through the Aadhaar Enabled Payment System, you can get money without producing any paper or card. However, your Aadhaar number should be registered with your bank account. If you did not linked your Aadhaar with a bank account the Aadhaar Enabled Payment System would not be useful to you. For AEPS transaction, you need following information.

  1. Aadhaar Number
  2. Bank IIN or Name
  3. Fingerprint

It means, you have to only remember your Aadhaar number to do the bank transaction. It is just like remembering own mobile number.

Why Aadhaar for Authentication

Remember, at the time of Aadhaar enrolment, your fingerprints and iris image were taken. These biometric data gets linked to the given Aadhaar number. These biometric data is unique to a person. No two person have the same iris image or fingerprints.  Thus, your Aadhaar number can be verified by your finger prints. This biometric authentication makes Aadhaar the perfect proof for the banking transactions. Indeed, It has replaced the signature.

How Aadhaar Authentication Works

Suppose, you claim to be Vijay and produce the Aadhaar number of Vijay. To verify it, bank official would take your fingerprints in a machine. The machine gives the fingerprint details to Aadhaar Payment app. The app immediately tallies your fingerprints with the fingerprints of the given Aadhaar. If it matches, the system would permit for the transaction. In case of mismatch, the system would not do any transaction.

How Aadhaar Enabled Payment System Works

It surprising that only through the Aadhaar number you can access your bank account. But it is possible because the Aadhaar is linked to your bank account. This linking leads you to your bank account. The fingerprint is authenticated by the UIDAI. In response to a transaction, UIDAI tells to the bank about the authenticity of the user. Once, UIDAI authenticates, the bank gives green signal to the transaction.

Thus, in the Aadhaar Enabled Payment System 6 institutions are involved.

  1. You, the bank customer
  2. Banking correspondent – The facilitator of AEPS
  3. The bank of BC – The bank to which banking correspondent is attached
  4. Your Bank – the bank with which you held the bank account
  5. NPCI – It does switching, clearing and settlement of transactions
  6. UIDAI – For finger-print authentication

Charges of AEPS

Unlike UPI, the AEPS is a relatively costly transaction. It can go upto Rs 15 for one transaction. On the other hand UPI charge is free to nominal. For AEPS, three institution involved can charge fees.

  • UIDAI may charge a nominal fees for authentication, however it is not charging yet.
  • The NPCI charges 10 paise for authentication and 25 paise for settlement.
  • The bank can charge 1% of the transaction value if it is related to other bank. The minimum fess for other bank transaction would be Rs 5 and maximum fees would be Rs 15.

However, the union government would bear the cost of AEPS payment until 31 Decmeber 2019. It is subsidizing debit card, UPI and AEPS MDR charge.

Know: Latest Debit Card Transaction Charges 

Also Read: Convenience of Samsung Pay


AEPS may be  costly than UPI and USSD but it gives a lot of convenience to the rural people. It would bring bank to their doorstep and save much time and transport expense. It would be just like a visit of ATM at every doorstep. That is why government calls the POS as micro ATM.

Recently, government has launched the BHIM Aadhaar Pay system. It has the virtues of BHIM app as well as AEPS. Using this platform, one can pay to merchant without the card or mobile. The thumb impression is used for authentication.