Banking & Finance 29 May 2025

AEPS

AEPS stands for Aadhaar Enabled Payment System.

It’s a banking service in India that allows people to do basic financial transactions using their Aadhaar number and biometric authentication (like a fingerprint), without needing a debit card, ATM, or even a passbook.

How does AEPS work?

When a customer visits a CSP outlet, they can do transactions by simply:

  • Providing their Aadhaar number
  • Selecting the bank name
  • Authenticating with fingerprint (via biometric scanner)

Once authenticated, the transaction is processed directly from their bank account linked with Aadhaar.

Services available through AEPS

  • Service : What it means
  • Cash Withdrawal : Withdraw cash from your Aadhaar-linked bank account
  • Balance Enquiry : Check bank account balance
  • Mini Statement : View last few transactions
  • Aadhaar to Aadhaar Transfer : Transfer money from one Aadhaar-linked account to another (less common now)


Benefits of AEPS

  • No need for ATM card, cheque, or signature
  • Very useful in rural areas where banks/ATMs are far
  • Secure (biometric authentication reduces fraud)
  • Interoperable (works across different banks)

Real life example

A villager visits a SBI CSP outlet, wants to withdraw ₹1,000.

They give Aadhaar number → Select SBI → Authenticate with fingerprint → Cash is withdrawn and given on the spot.

Banks supporting AEPS

Almost all major banks in India support AEPS through NPCI (National Payments Corporation of India).

How CSP agents earn from AEPS?

When customers use AEPS services (like cash withdrawal, balance enquiry, mini statement) at a CSP outlet, the CSP agent earns a small commission per transaction — paid by their bank or BC aggregator.

Typical Commission Structure (Approximate)

  • AEPS Service Commission per transaction
  • Cash Withdrawal ₹5 to ₹15
  • Balance Enquiry ₹0.50 to ₹2
  • Mini Statement ₹1 to ₹3
  • Aadhaar to Aadhaar Fund Transfer ₹5 to ₹15 (less commonly used now)

How is the commission paid to CSP agents?

  • Instantly or next-day settlement in their wallet (provided by BC aggregator)
  • From the wallet, agents can transfer earnings to their own bank account

Comments - 1

  • ...

    Samim Sarkar 6 months ago

    Good Information

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