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AEPS: A Complete Guide to Aadhaar Enabled Payment System

Aadhaar Enabled Payment System or better known as AEPS, developed by the umbrella body for digital transactions NPCI- National Payment Corporation of India, is a kind of a payment system that allows to carry out financial transactions by way of Aadhaar based verification. AEPS is based on the Unique Identification Number or the Aadhaar number and permits the Aadhaar cardholders to initiate and complete the transactions effortlessly. It is a way to empower all segments of the society by making banking and financial service areas accessible to everyone through Aadhaar. 

Scope of AEPS

AEPS is nothing but an Aadhaar-enabled payment system with the help of which you can perform many basic banking transactions like making several payments, interbank or Intrabank money transfer, making withdrawals, depositing cash, enquiring about your bank balance, etc. AEPS Is a simple, safe and user-friendly platform for all your financial transactions. AEPS permits clientele to make payments using their Aadhaar and by providing Aadhaar authentication at the point of Sale or PoS or micro ATMs. This is another initiative taken by the National Payments Corporation of India (NPCI) to encourage cashless transactions in India. You can do all transactions through a Business Correspondent or BC or any bank agent by means of a micro ATM. And except for fund transfer, wherein you would be required to go to a precise bank BC, for several other transactions you may use any bank BC. AEPS has been formed to speed track the Financial Inclusion in the country thereby

Let us understand briefly what an Aadhaar is.

What is an Aadhaar?

An Aadhaar is a 12-digit unique number issued by the UIDAI- Unique Identification Authority of India to the Indian residents. Any person, irrespective of age and gender may voluntarily enroll to have his or her Aadhaar number. The Individual has to give his or her demographic and biometric information at the time of the enrollment process and does not have to pay any charge for the same. Aadhaar Enrolment is done only once and is valid for the entire life. And with this unique card, you will not only be able to get many benefits but can use the same for other financial transactions as well, which are required in our daily lives.

Here, we will talk more about aadhaar enabled payment systems and various aspects of AEPS in detail. 

Uses of AEPS

AEPS is a bank-controlled model that allows online interoperable financial inclusion transactions at Point of Sale-PoS or Micro ATM through the bank’s Business correspondent utilizing the Aadhaar authentication. AEPS permits mainly 6 types of basic financial transactions that can be performed through AEPS registration and they are listed as below:

  • The facility of Cash deposit
  • The facility of Cash withdrawal
  • Easy Balance inquiry
  • The benefit of Intra-bank or Interbank fund transfer
  • Hassle-free purchasing at fair shops
  • Obtaining a mini statement

Benefits of AEPS

AEPS aims is to build a strong foundation for a whole variety of Aadhaar empowered Banking services with several benefits and they can be summarized as below:

  • Very easy usage
  • Completely safe and protected method of payment 
  • Interoperable across many banks
  • Boosts the financial inclusion and assists the underprivileged segment of the society
  • Using AEPS, bank account holders will be in a position to access their accounts in banks through Aadhaar authentication
  • With AEPS digital India payments, the only prerequisite needed for initiation of a transaction is Aadhaar number and the respective biometric information
  • AEPS eases the payments of many Government schemes like Social Security pension, NREGA Handicapped Old Age Pension, etc. of Central Government or State Government bodies by way of Aadhaar authentication

Requirements for AEPS transactions:

Even though Aadhaar Enabled Payment System does not need any document nor any card, it does require you to link your Aadhaar to your bank account. If you do not link your Aadhaar, you will not be able to enjoy the AEPS facility.

The main requirements of an AEPS transaction to perform successfully are:

  • Aadhaar Number
  • Bio-metrics -Fingerprint
  • Name or Bank IIN or Issuer Identification Number
  • Micro ATM
  • Assisted mode

In simple language, it means that for you to carry out an AEPS transaction, have your Aadhaar number with you and the rest of the process can be done smoothly.

How to use Aadhaar Enabled Payment System?

You need to follow the below steps to do an AEPS registration:

  • Step 1: You need to visit the nearest banking correspondent in your zone. Take note here is that he or she doesn’t have to have to be a correspondent from your bank only
  • Step 2: After the above step, you would be required to enter your 12-digit Aadhaar number of the Unique Identity Number stated in your Aadhaar Card in the POS- Point of Sale machine
  • Step 3: Choose the type of transaction which you want to do- Cash withdrawal, Cash deposit, Intrabank or Interbank fund transfer, Obtain a mini statement, Balance inquiry
  • Step 4: Select the name of the bank.
  • Step 5: Fill in the amount of the transaction
  • Step 6: Authenticate the transaction by giving your biometrics like a fingerprint or your iris scan
  • Step 7: The transaction will be completed in no time, after which you can collect the respective receipt 

Charges for AEPS

AEPS transaction cost is nil for you as a customer and you need not pay anything to avail of this service. The Merchant or Banking Correspondent may be charged or paid upon the bank ‘s decision. The transaction cost is divided between the following sections:

  • UIDAI charge a very minimal fee
  • NPCI charge 15 paise to 25 paise for the settlement
  • Banks may charge till 1% of the particular transaction. The minimum charges are INR 5 and the maximum are INR 15

Transfer limit of AEPS

There is a standard limit that is set by RBI for transactions made through AEPS, although banks have the liberty to define a limit for all these transactions. Few banks have set the limit of the transaction to evade misuse or misappropriation of this system. Many banks have set up a daily limit of INR 50,000 on the total transactions done by anyone, however, it may vary from bank to bank as mentioned.

Reason behind AEPS

Indian Government has taken the initiative “Cashless India” and thereby decided to bring together all the unbanked segments of the society under the banking umbrella. This is not possible geographically for individuals living in distant and far-off places. And this is the exact reason why the government has come up with this facility to provide them entry to the banking amenities, where individuals can effortlessly send or obtain funds and take the benefits of banking as well as non-banking facilities with the support of micro-ATMs and banking officials. Furthermore, transactions done through fingerprint or iris recognition makes the procedure secure. The process of AEPS has also abolished the hassle of having a physical bank passbook and debit card as these transactions can be performed with your Aadhaar number only and your fingerprints.

Important points to remember in AEPS

You must remember the below points before you start using AEPS:

  • Neither OTP nor PIN is needed for performing any transactions through this new method
  • Your bank account must be linked with your Aadhaar if you wish to avail this particular service
  • In case, if you have multiple accounts in a bank, the main account only will be used under the system of AEPS
  • Aadhaar Enabled Payment System supports the transactions between your Aadhaar linked bank accounts and not any other unlinked accounts
  • You can link many bank accounts with Aadhaar to use this facility. But you will be able to use only one account per bank for availing the facility.
  • The cut-off time of the transactions performed through AEPS stands at 11PM IST every day. And all transactions done before this cut- off time for the day are counted in in the settlement of that particular day

Given the larger benefits and uses of AEPS, you must start to take the maximum advantage o this system and help the government in their initiative to make India cashless.


You can have any type of bank account but the same has to be linked with Aadhaar for using AEPS.

Yes, you can. It is possible to link one or more bank accounts with your Aadhaar card.

No, it is not essential for the payee or the beneficiary to have the facility of AEPS to get funds.

An IIN or Issuer Identification Number is a 6-digit number that supports the identification procedure of your bank. These identify the institution that issued the card to the respective cardholder.

There are about 118 banks under the Aadhaar Enabled Payment System.