Aadhar enabled payment system
Economic Development > Indian Economy and Issues > Financial inclusion
Why in news?
- NPCI sets standardised limits for cash withdrawals and mini statements on Aadhaar-enabled Payment System (AePS) transactions
About Aadhar enabled payment system:
- AePS is developed by the National Payments Corporation of India (NPCI) that allows people to carry out financial transactions on a PoS (Point of Sale / Micro ATM) by furnishing just their Aadhaar number and verifying it with the help of their fingerprint/iris scan.
- With the help of this payment system, funds can be transferred from one bank account to another simply through their Aadhaar numbers.
- The only inputs required for a customer to do a transaction under this scenario are:
- Bank Name
- Aadhaar Number
- Fingerprint captured during enrollment.
Services Offered through AePS:
- Banking services:
- Cash Deposit, Cash Withdrawal, Balance Enquiry, Mini Statement, Aadhaar to Aadhaar Fund Transfer, Authentication and BHIM Aadhaar Pay
- Other Services offered by AePS:
- eKYC, Best Finger detection, Tokenization and Aadhaar Seeding Status
How does AEPS work?
- The AEPS system leverages Aadhaar online authentication and enables Aadhaar Enabled Bank Accounts (AEBA) to be operated in anytime-anywhere banking mode through Micro ATMs.
- The beneficiary bearing a UID number approaches a business correspondent (BC) with the request to withdraw cash.
- A Business Correspondent (BC) is an approved Bank Agent providing basic banking service using a Micro ATM.
- The business correspondent feeds beneficiary’s UID number, fingerprints and amount into the micro-ATM.
- The Aadhaar server authenticates the beneficiary’s ID and gets his bank account using the ID mapper. Once this is successful, the debit and credit transaction is carried out and then a message is sent to the beneficiary and BC and beneficiary gets his cash.
- According to the guidelines, acquiring banks will have to implement a maximum limit of five approved cash withdrawal transactions per customer per terminal per day.
- Acquirers must implement two-factor authentication for login of business correspondents, agents and merchants at least once a day with one of the factors as Aadhaar based biometric authentication.
- Cash withdrawal from micro ATMs of AePS has a limit of Rs 10,000 per transaction.
With reference to ‘Aadhar enabled payment system’, consider the following statements:
1. It is developed by the National Payments Corporation of India
2. AePS does not offer cash deposit and withdrawal facilities
Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2