How to Activate (Enable) AEPS Service
Aadhaar Enabled Payment System (AEPS) is a revolutionary financial inclusion initiative by the National Payments Corporation of India (NPCI) that empowers users to carry out banking transactions using their Aadhaar number and biometric authentication. AEPS service allows people, especially in rural areas, to access banking services with ease without needing a physical bank branch. Through this system, individuals can withdraw cash, transfer funds, make balance inquiries, and access mini statements using their Aadhaar card, fostering financial inclusion and digital transformation across India.
If you are a business or individual looking to enable AEPS services, this blog will guide you through the process, highlighting its importance and the steps involved in activating this service.
Understanding AEPS: A Quick Overview
Before diving into how to activate AEPS, it’s essential to understand what it is and how it works.
AEPS is a bank-led model that facilitates banking services via micro ATMs using Aadhaar and biometric verification. Customers need to visit Banking Correspondents (BCs) or business correspondents who provide AEPS services to conduct transactions. The following services are available via AEPS:
- Cash Withdrawal
- Cash Deposit
- Balance Enquiry
- Aadhaar-to-Aadhaar Fund Transfer
- Mini Statement
To perform these transactions, the user needs to have their Aadhaar number linked to their bank account. AEPS is a boon for rural and underbanked communities, eliminating the need for ATM cards or PIN numbers. The service also encourages cashless transactions and is in line with India’s push toward a digital economy.
Why AEPS Is Important for Your Business
If you run a business in sectors like retail, fintech, or payment services, enabling AEPS can provide numerous benefits, including:
- Boost Customer Convenience: By enabling AEPS, you can provide your customers with convenient banking services right at your store. This adds value to your business and can increase customer footfall.
- Serve the Unbanked: India has a vast population of unbanked or underbanked individuals, especially in rural areas. AEPS allows you to cater to these customers by offering essential banking services.
- Earn Commissions: AEPS operators or Banking Correspondents earn a commission on every transaction they process. This can be a lucrative side income for businesses.
- Promote Financial Inclusion: By offering AEPS services, you contribute to a more inclusive economy, helping customers access their finances easily.
Steps to Activate AEPS Service
Activating AEPS services involves a few critical steps. Below is a step-by-step guide on how you can start offering AEPS services.
1. Register with a Bank or AEPS Provider
To activate AEPS, you need to partner with a bank or AEPS service provider. Many companies in India are authorized to offer AEPS services through partnerships with NPCI. These providers give you the necessary infrastructure and software to enable AEPS services at your location.
Some of the popular AEPS service providers include:
- PayNearby
- Spice Money
- Fino Payments Bank
- RBL Bank
You can choose one of these platforms or directly partner with your local bank that supports AEPS operations.
2. Set Up a Business Account
3. Install AEPS Software or Application
Once your account is set up and verified, the AEPS service provider will offer you the software or mobile application required to process AEPS transactions. Most service providers use mobile apps, which are easy to install and use.
Additionally, they will provide you with login credentials to access the portal. The app or portal will allow you to initiate transactions, view transaction history, and manage customer requests.
4. Set Up a Micro ATM or Biometric Device
The core of AEPS transactions is biometric verification. To perform this, you will need a biometric device or micro ATM, which captures the customer’s fingerprint for authentication. The device connects to your mobile app or computer to complete the transaction.
Many AEPS service providers offer integrated biometric devices or suggest compatible ones. These devices are easy to use, portable, and affordable. Some popular biometric devices include Mantra MFS100 and Morpho MSO 1300.
5. Link Your Aadhaar-Linked Bank Account
Linking Aadhaar to a bank account is crucial, especially for processing AEPS (Aadhaar Enabled Payment System) transactions. When a transaction is initiated, the customer’s biometric data is seamlessly matched with the Aadhaar database. As a result, the funds are either debited or credited directly from the Aadhaar-linked bank account. Moreover, this streamlined process ensures secure and efficient transactions. Therefore, it is essential to ensure that your Aadhaar is linked to your bank account to take full advantage of AEPS services.
If the Aadhaar has not yet been linked to the bank account, the seeding process must be completed by visiting the bank.
6. Train Your Staff
If you’re offering AEPS services through your retail store, ensure that your staff is well-trained to handle customer queries, operate the micro ATM, and troubleshoot any issues. AEPS is a simple process, but training can improve customer experience and reduce transaction errors.
Most AEPS service providers offer training modules or guides to help you and your staff get familiar with the system.
Important Features and Benefits of AEPS
AEPS offers several benefits, which make it a reliable and essential service, especially for rural and remote areas. Some of the key features include:
- Interoperability: AEPS works across all banks. A customer from any bank can use AEPS, making it a universal system.
- Secure Transactions: AEPS uses biometric authentication, which ensures high levels of security. Only the account holder can authorize transactions using their fingerprint.
- 24/7 Availability: AEPS transactions can be done at any time, providing flexibility to customers who may not have access to traditional banking services.
- Instant Processing: Most AEPS transactions are processed in real-time, ensuring fast fund transfers and withdrawals.
How AEPS Empowers Rural India
The primary beneficiaries of AEPS are individuals in rural India who have limited access to banks and ATMs. AEPS eliminates the need for debit cards or ATMs, making it easier for villagers to access financial services through local agents.
Moreover, thanks to initiatives like Pradhan Mantri Jan Dhan Yojana (PMJDY), millions of Aadhaar-linked accounts have been opened. As a result, more people are empowered to use AEPS, expanding financial inclusion and providing greater access to digital payment services. In this way, AEPS is helping bridge the gap between traditional banking and modern financial technology.