Here's how you can use Aadhaar Enabled Payment System to make payments

Aadhaar is now becoming essential in every aspect in India. According to reports, 1.12 billion Indians are now Aadhaar holders. The Aadhaar Enabled Payment System (AEPS) allows you to use your UIDAI as a tool to make payments and banking activities. It functions via the National Payments Corporation of India (NPCI).

Under banking activities, you can make Aadhaar to Aadhaar transfers, check your balance, make cash deposits and withdraw cash. The payments are similar to Point of Sale (PoS) payments. However, your debit or credit cards will not be required here.

> You have an Aadhaar

> Your Aadhaar is linked with your bank account. Linking Aadhaar to your bank account is compulsory and it has to be done by December 31.

Also read:  Not able to link Aadhaar to bank a/c? Banks to provide enrolment, update facilities

> First, select the bank which is linked to your Aadhaar on a MicroATM. Each bank has an Issuer Identification Number (IIN). This will be written next to bank logos/bank names. MicroATMs will look like point of sale machines, which are used at the time of card payments, but with a provision of scanning your fingerprint and punching in details.

> Then punch in your Aadhaar number and authenticate it with your fingerprint, i.e., your biometric data.

According to Business Today, merchants will be allowed to use their smartphones to scan their customers' fingerprints and make AEPS payments.

(Source : Business Today)

> When you buy something and want to make an AEPS transaction, instead of a cash or PoS payment, you will be required to punch in your Aadhaar number in a MicroATM.

> Select your bank via the IIN

> Press your fingers against the biometric feed on the MicroATM for your fingerprint

> The bank account, which is linked to your Aadhaar, will be notified about your payment via the NPCI switch. It will match the details provided with the bank. If matched, your payment will be successful.

The NPCI is used for tracking inter-bank ATM transactions and Interbank Mobile Payment Service (IMPS). With this collaboration, you will be able to do banking activities on a MicroATM. You will be required to provide your Aadhaar details, your fingerprint and choose the linked bank via the IIN.

Cash deposits here cannot be made physically. Only cash deposits can be transferred from one bank to another. You will have to approach the bank where you want the money to be deposited and then punch in your details there — your bank's IIN, the amount of cash you want to be deposited to the acquirer bank, your Aadhaar number and your fingerprint. The NPCI will notify the issuer bank and the cash will be deposited.

Here, apart from providing your details, you will be required to give the beneficiary's details as well. You will have to provide the beneficiary's bank details via IIN, and their Aadhaar number.

Apart from your Aadhaar, IIN and biometric details, you will have to punch in the amount you want to withdraw. Same as in the above case, the NPCI will notify the issuer bank and you will get the amount you desire to withdraw.

> You can only use AEPS where a MicroATM facility is available. As of now, it can only be done via Business Correspondents.

Business Correspondents, recognised by the Reserve Bank of India (RBI), require the banks to engage with NGOs, Post Offices, Micro Finance Institutions, etc. to enable Aadhaar-related transactions.

> While you can link how many ever bank accounts to your Aadhaar, you are required to make only one as your primary account where you would receive all AEPS transactions.

(Sources: 1 , 2 )