Aadhaar Enabled Payment System (AEPS) is a secure and convenient digital payment mechanism introduced by the Government of India to facilitate financial transactions for individuals who may not have access to traditional banking services. AEPS leverages the Aadhaar biometric data to authenticate and authorize financial transactions directly through Aadhaar-linked bank accounts.

Here are key features and aspects of Aadhaar Payment (AEPS):

1.Biometric Authentication*: AEPS uses fingerprint or iris scanning technology for biometric authentication. This adds an extra layer of security to ensure that only the rightful account holder can access and transact through the system.

2.Financial Inclusion: AEPS plays a crucial role in promoting financial inclusion by allowing individuals without traditional banking access to perform basic banking transactions. This is particularly beneficial for rural and remote areas where physical banking infrastructure may be limited.

3.Transaction Types: AEPS supports various financial transactions, including cash withdrawals, balance inquiries, and fund transfers. Users can perform these transactions at micro-ATMs, which are essentially point-of-service terminals operated by banking correspondents.

4.Aadhaar-Linked Bank Accounts: To use AEPS, individuals need to link their Aadhaar numbers with their bank accounts. This linkage ensures a seamless and secure connection between the individual's unique identification (Aadhaar) and their bank account for transactions.

5.Secure and Transparent: The use of biometric authentication enhances security, reducing the likelihood of fraudulent transactions. Additionally, AEPS promotes transparency in financial transactions as it eliminates the need for physical documents and signatures.

6.Government Initiatives: AEPS aligns with the government's broader initiatives such as Direct Benefit Transfer (DBT) and subsidy distribution. It enables the direct transfer of government subsidies and benefits to the bank accounts of eligible beneficiaries, eliminating intermediaries and reducing leakages.

7. Ease of Use: AEPS is designed to be user-friendly, allowing individuals to perform transactions with minimal hassle. The reliance on biometrics makes it accessible to individuals who may not be proficient in traditional banking methods.

Overall, Aadhaar Payment (AEPS) plays a pivotal role in advancing financial inclusion, promoting a cashless economy, and ensuring that even those without access to traditional banking services can participate in the digital financial ecosystem securely.