AePS
Aadhaar Enabled Payment System (AePS) is an NPCI-operated payment system that allows banking transactions — cash withdrawal, balance enquiry, fund transfer — through Aadhaar number authentication using biometric verification (fingerprint or iris) at micro-ATMs and Business Correspondents.
Understanding AePS
AePS was launched in 2014 to extend banking services to areas without ATM infrastructure. A BC agent equipped with a micro-ATM and biometric scanner connects to the AePS network — customers can withdraw money from any bank account linked to their Aadhaar without carrying a card.
The system has been crucial for direct benefit transfers (DBT) — government subsidies, pensions, MGNREGA wages flow into Aadhaar-linked accounts and can be withdrawn at the nearest BC agent. India has over 14 lakh BC agents nationwide.
Why it matters
AePS extends financial inclusion to last-mile users — especially those without smartphones or active bank cards. For social welfare delivery, AePS underpins the entire Direct Benefit Transfer architecture. AePS frauds (where fraudsters clone fingerprints) are a known concern; locking biometric authentication via UIDAI's portal is a recommended safeguard.
Example
A villager in rural UP receives their MGNREGA wage of ₹4,500 in their SBI account linked to Aadhaar. They visit the nearest BC agent (typically a kirana shop with a micro-ATM), give their Aadhaar number, place their thumb on the biometric scanner — the AePS network authenticates, debits SBI, and the agent hands over cash. No card, no PIN, no smartphone.
A villager in rural UP receives their MGNREGA wage of ₹4,500 in their SBI account linked to Aadhaar. They visit the nearest BC agent (typically a kirana shop with a micro-ATM), give their Aadhaar number, place their thumb on the biometric scanner — the AePS network authenticates, debits SBI, and the agent hands over cash. No card, no PIN, no smartphone.