AEPS for Merchant Payment

Are you living in an area where going to the bank is a difficult task because you don’t have convenient transport access, or you have to travel across towns just for banking? Then don’t worry anymore. Micro ATMs will be at your doorstep through Aadhaar Enabled Payment System (AEPS). It is a method of getting money from the bank account without using a debit card and signature. It can be said that AEPS is a bank-led model that facilitates the transaction from Micro ATM or POS through a business correspondent of any bank using the Aadhaar authentication system.

In an effort to increase the financial inclusion in the country through Aadhaar authentication and make banking accessible to the marginalized and excluded section of the society through Aadhaar enabled bank accounts or to people living in rural areas from where banks are very far, UIDAI partnered with NPCI, RBI and banks for developing two platforms:

1. Aadhaar Payments Bridge: APB is a system for enabling the impeccable transfer of welfare scheme benefits to the beneficiary resident holding the bank accounts through Aadhaar authentication.
2. Aadhaar Enabled Payment System

Advantages of Aadhaar Enabled Payment System:

1. There is no requirement of signature.
2. It’s a fast and secure transaction system as it can’t be manipulated due to fingerprint scanning. If there is a mismatch with records on Aadhaar, the transaction will be disabled.
3. It’s a form of mobile banking as the bank correspondent will reach the customer even in remote areas with micro POS (Point of Service) device.

Services Offered Through AEPS:

There are various services that are provided by AEPS:

1. Cash withdrawal
2. Cash deposit
3. Balance enquiry
4. Aadhaar to Aadhaar fund transfer through bank correspondent of your own bank
5. Biometric authentication

Note : Except fund transfer, all the services can be availed through bank correspondent of any bank.

Information Required for Aadhaar Enabled Payment System:

For using AEPS, Aadhaar card should be linked with a bank account as it can’t be done without it. Here is the list of information required for using AEPS:

1. Aadhaar number
2. Bank IIN (for identifying bank) or Name
3. Fingerprints

Why is Aadhaar Required for Authentication?

At the time of Aadhaar enrolment, fingerprints and iris scan gets captured for biometric authentication, and the biometric data is linked to the Aadhaar number. No two persons can have the same biometric data and Aadhaar number, due to which, Aadhaar number verification can be done by fingerprint scanning at the time of banking through AEPS. Hence, Aadhaar authentication helps in secured banking.

Steps of Doing Transactions Through AEPS:

1. The customer needs to provide Aadhaar number, details of transaction and fingerprints to the business correspondent at the micro ATMs.
2. The digital data, in the encrypted form, is transferred from NPCI to UIDAI through ‘Bank Switch’.
3. UIDAI will proceed the authentication request and communicate the outcome.
4. If the records matched and UIDAI responded positively, the bank will initiate the required authorization and advise the micro ATM about the next step.

Charges of AEPS:

AEPS can be quite costly in comparison to free UPI payments and can go up to Rs.15 per transaction when it will becomes chargeable; but as of now, it is free. The union government is bearing the cost of AEPS payments till 31st December 2019.

BHIM Aadhaar Pay:

Bhim Aadhaar Pay is an easy mode of cashless transaction and allows the customers to pay the merchant of any bank just through biometric authentication (fingerprints) from Aadhaar enabled bank account of customer as well as merchant, as the interface of the app uses Aadhaar to connect with the customer and the merchant’s bank account. Due to this payment app, users don’t need a debit card. Bhim Aadhaar Pay platform was launched on the birth anniversary of Dr.Bhim Rao Ambedkar.

This platform is the next step to UPI payment system, because in UPI payments, authentication is done through linked mobile number but here biometric records are used for authentication. Just like there are many UPI payment apps, similarly there are many BHIM Aadhaar Pay apps too. Even some banks also launched merchant Aadhaar pay apps for their customers, such as ‘SBI Aadhaar Pay’ app was launched in February 2017 and is available on the google play store. However, every bank's app is not on play store. In such cases, the merchant needs to contact the bank, and the bank will give the download link after verification.

How Does BHIM Aadhaar Pay App Work?

BHIM Aadhaar App is for merchants; so, customers don’t need to install it in their mobile phones. They can pay at shops through the app by using thumb impressions. However, merchants need to install it on their android or iOS mobile phones. To receive the payments from customers, merchants, as well as customers who are doing payment, need to link their bank accounts to Aadhaar. As BHIM Aadhaar Pay app is based on Aadhaar Enabled Payment System, it will use the Aadhaar number to connect with the customer and the merchant.

The benefit of this app is that merchants don’t need POS machine and the customers don’t face the hassles of keeping a card, swiping it and entering the pin.

How to Download and Setup the BHIM Aadhaar Pay App?

1. Install the app from the google play store and enter your details, such as name, address, Aadhaar number, etc. Choose the bank with which you have the account and generate the request to the bank.
2. The bank will contact you to help in the registration process. After the registration is complete, an activation link will be sent to you.
3. After installing the app, connect your phone with a fingerprint scanner and thereafter link your bank account with the app through Aadhaar.
4. Use the fingerprint scanner for taking your fingerprints. After the successful authentication, your bank account will be linked with the app.

Cashback and Referral Offers:

The Government has set a budget of Rs 495 crores for cashback and referral schemes launched for the normal users and merchants. To promote BHIM Aadhaar app among merchants, the government is giving a cashback of Rs 300.