Do you know more than 131 crore adults registered with Aadhaar have seamless access to banking services, insurance, and direct benefit transfers from over 700 financial inclusion schemes announced by the central and state governments? Sounds interesting, right? 

But this wasn’t possible until 2016.  

Thanks to the Aadhaar Enabled Payment System (AePS), which marked its debut in 2016, this vision is becoming a reality in India. AePS has transformed last-mile banking services, bridging the gap between traditional banking and underserved communities.  

Through this blog, we will explore how AePS is revolutionizing the financial landscape, empowering the unbanked population, and fostering financial inclusion. 

Enabling universal access to financial services 

With over 1.31 billion Aadhaar card holders in India, AePS has provided seamless access to banking services across rural India and Tier I and II cities. Previously, digital payment modes catered to the tech-savvy population, leaving behind senior citizens, underprivileged individuals, and the unbanked. AePS fills this gap by offering a simple and inclusive solution. 

What is AePS? 

AePS is a bank-led payment model that leverages India’s unique identification system, Aadhaar, to facilitate secure and convenient banking transactions. Aadhaar, a 12-digit unique identification number, serves as proof of identity and address. With the help of Business Correspondents, individuals can conduct monetary transactions at micro-ATMs or points of sale using their Aadhaar number via AePS. 

How has AePS facilitated banking to the last mile? 

Seamless banking services 

AePS offers services like banking transactions, Aadhaar-to-Aadhaar fund transfers, cash withdrawal, Aadhaar Pay, authentication, cash deposit, balance inquiry, and mini statements. This comprehensive suite of services caters to the diverse needs of individuals, empowering them with financial control and convenience. 

Empowering the unbanked population 

AePS has become a catalyst in reaching underserved populations, transforming micro-ATMs, correspondents, and mobile devices into transaction points. This technology enables individuals to perform banking operations using their Aadhaar-linked biometrics, eliminating the need for physical documents and formal identification. It breaks down barriers and empowers the unbanked to participate in the digital banking ecosystem. 

Convenience, security, and transparency 

AePS brings banking services closer to people’s doorsteps, reducing the distance and time required to access financial services. This is particularly crucial for rural areas with limited infrastructure. By leveraging Aadhaar biometrics, AePS ensures secure and reliable transactions, mitigating identity theft and fraud risks. The transparency provided by AePS reduces corruption and leakage in government benefit schemes, ensuring that funds reach the intended recipients. 

What are the requirements for AePS transactions?  

AePS does not need a smartphone, document, or payment card. It only requires the customer to link the Aadhaar card to the bank account to capture the following info. 

    • Aadhaar Number 

    • Biometrics-fingerprint identification 

    • Name or Bank Issuer Identification Number (IIN) 

If not, just remembering the last four digits of the Aadhaar number will do. The Business Correspondent with an AePS machine or Micro ATM on assisted mode should be able to do any transaction for the customer. 

How has AePS provided an additional source of income to retailers? 

AePS presents an additional source of income for retailers and merchants. By accepting AePS payments, merchants can widen their customer base and offer inclusive payment options. Banks and merchants benefit from the cost efficiency of AePS, reducing the need for physical cards, passbooks, or smartphones. This results in enhanced revenue and cost-cutting for banks, enabling them to extend their services profitably to remote areas. 

Empowering rural India  

AePS is a game-changing innovation in banking and finance, particularly for rural India. By utilizing the UID instead of traditional debit cards, Aadhaar holders can perform financial transactions, even without smartphones. As per an ET report, AePS has facilitated over 1.31 billion last-mile banking transactions by January 2023, thanks to banking correspondents acting as intermediaries between customers and banks. With over 1.32 million Business Correspondents offering services to more than 600 million people in rural India, AePS is empowering communities and driving financial inclusion. 


As we witness the power of AePS in fostering financial inclusivity, it’s clear that this technology is the driving force behind India’s digital revolution. So, don’t wait any longer – embrace AePS today and be a part of this transformative journey, as we pave the way towards a more financially inclusive and empowered society. Together, let’s create a brighter future for all, where banking services reach every corner and touch the lives of those who need them the most.