Saturday, June 16, 2012

AEPS – Aadhaar Enabled Payments System




NPCI in the recent past rolled out a new Banking Product I.e AEPS.

The working group to finalize the standards included members from RBI, UIDAI, NPCI, IDBRT apart from special invitees from Banks and Research Institutions.

A Proof of Concept was demonstrated to the various stakeholders evolved in the AEPS cycle.

AEPS is a bank led model which allows online financial inclusion transaction at PoS ( MicroATM) through the Business correspondent of a bank using the Aadhaar authentication.

At present AEPS service can be availed by customers at their respective bank business correspondent outlets.

4 types of basic banking transactions have been initially activated for AEPS. They are : -

01) Balance Enquiry
02) Cash Withdrawal
03) Cash Deposit
04) Aadhaar to Aadhaar Funds Transfer

Only minimal inputs are required for a customer to do a transaction through a Business Correspondent's MicroATM. The minimal fields are :

a) IIN (Identifying the Bank to which the customer is associated)
b) Aadhaar Number
  1. Fingerprint captured during their enrollment

The complete FAQ's on AEPS can be viewed here.

The infrastructure is now ready, and now the State Governments should have started to roll out the payouts through the AADHAAR platform. However, as the volumes are not picking up, Union Finance Minister has written to the Chief Ministers of 16 states/union territories to expand the number of districts for the Pilot run on the AADHAAR platform.

The Chief Minsiters to whom the Finance Minister has written letter include the Chief Minister(s) of Kerala, Haryana, Himachal Pradesh(HP), Punjab, Rajasthan, Sikkim, Tripura, Goa, Gujarat, Jharkhand, Delhi, Puducherry, Karnatka, Madhya Pradesh(MP), Andhra Pradesh(AP) and Maharashtra.

Intially the pilots are proposed to be for Public Distribution System, LPG distribution, Kerosene disbursal, Government pension schemes, Janani Suraksha Yojana, Government Scholarships, Financial Inclusion, Kisan Credit Cards (KCCs) and MGNREGS wage disbursal.

However the above is only an only an illustrative list and the Chief Minister(s) may like to include other schemes in their respective State/Union Territory for initiation of pilots based on the Aadhaar platform
The more the Pilot runs, the more data will be available to fine-tune the process flow.