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With an aim to have financial inclusion in the country by giving financial independence to the underprivileged class of the society, RBI (Reserve Bank of India) constituted two working groups. The two groups worked on;

  1. MicroATM standards

  2. Central Infrastructure & Connectivity for Aadhaar based financial inclusion


As soon as they submitted a report to the Reserve Bank of India, the Aadhaar Enabled Payment System or AEPS was introduced.

What is the Aadhaar Enabled Payment System?

Aadhaar Enabled Payment System or AEPS is an Aadhaar-based authentication model and it is used to carry out financial transactions through micro-ATMs or PoS (Point of Sale). This facility was introduced for merchants and business correspondents to make their financial transactions easier. 

A platform for Aadhaar Enabled Bank Account (AEBA) holders from the marginalized sections of the society was developed. Using this, AEBA holders can access banking facilities on micro-ATMs and for that, the Aadhaar authentication is enough.


A customer should have his/her bank account linked with the Aadhaar number to use this service. You should provide your fingerprint, Aadhaar number, and IIN (Issuer Identification Number) (a 6-digit number that identifies the bank with which the customer is associated) at the time of enrolment. You can carry out the transactions either through a Business Correspondent or a bank agent on micro-ATMs. The transactions that can be carried out using AEPS service are:

  • Cash withdrawal

  • Cash deposit

  • Payment Transactions

  • Aadhaar to Aadhaar fund transfer

  • Balance enquiry

  • Fingerprint detection

  • Get a mini statement

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How to Use an Aadhaar Enabled Payment System?

Follow the below-mentioned steps to carry out AEPS transactions.

  • Step 1: Go to your nearest bank and reach out to the banking executive, it does not necessarily have to be the bank you have an account with.

  • Step 2: Enter your 12-digit UID (Unique Identity Number) of your Aadhaar Card on the PoS machine they have.

  • Step 3: You have to select the type of AEPS transaction you want to carry out. It can be AEPS cash withdrawal, balance enquiry, intrabank or interbank fund transfer or cash deposit.

  • Step 4: Choose the name of the bank.

  • Step 5: Enter the transaction amount in case of withdrawal, transfer or deposit of funds.

  • Step 6: Authenticate the AEPS transaction through your biometrics like iris or fingerprint scan.

  • Step 7: Once the transaction is completed, you will receive a receipt.

Objectives of Aadhaar Enabled Payment System

The intentions behind introducing AEPS were:

  • To allow users access to financial transaction activities and basic banking services such as cash deposit or withdrawal, getting a bank statement, etc using their Aadhaar numbers.

  • To induce financial inclusion and promote Aadhaar enabled banking services.

  • To carry out all Aadhaar enabled payments through a central switching and clearing agency.

  • To support safe and secure interoperability for banks.

  • To enable easy disbursements of government entitlements like pensions using Aadhaar authentication.

BHIM Aadhaar Pay

Using the BHIM Aadhaar Pay, merchants can receive payments from their customers digitally. Through Aadhaar authentication, the customers can make a payment over the counter. A thumb impression or scan is the only requirement. The BHIM app uses a virtual address for payment transfers between individuals and will not disclose one’s bank account number. Merchants with an account in the bank under the BHIM Aadhaar Pay network are eligible for this.


To use BHIM Aadhaar Pay, merchants should have an Android mobile to download the BHIM Aadhaar app, but the customers do not need a credit card or a debit card or even a smartphone for the payment completion. A biometric scanning device should be connected to the smartphone to accept payments from customers. After authenticating the customer’s biometric data, the merchants can receive the payments instantly from the Aadhaar enabled bank account of the customer.


The Aadhaar Enabled Payment System (AEPS) aims to help small businesses and merchants carry out financial transactions through micro-ATMs or PoS (Point of Sale), conveniently. There are several types of instant transactions that can be covered after having your bank account linked with the Aadhaar number. 


Another important use of your Aadhaar Card is that it can allow you to secure a house loan. For this, simply visit Bajaj Markets to explore the loan options available there and check your eligibility. 

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