If the Unified Payments Interface has captured the spotlight for its ease of use and popularity, its lesser known peer Aadhaar enabled Payment System (AePS) too has been gaining equally steady traction.

Data with the National Payments Corporation of India (NPCI) reveals that the value of transactions through AePS has nearly doubled to Rs 21,978.51 crore in January 2021 from Rs 11,286.61 crore in January last year. The total approved transactions has also grown by 47 per cent in this one year period to 31.51 crore by January this year.

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Players say that AePS has been significantly popular in rural areas and received a massive push during the Covid-19 pandemic led lockdown. AePS transactions can be done easily at PoS (MicroATM) through the Business correspondent of any bank using the Aadhaar authentication. The only inputs required from a customer are the bank name, Aadhaar number and fingerprint captured during enrolment and obviates the need for a smartphone or a visit to a bank branch.

“Our AePS transactions doubled from over 44 lakh in March 2020 (pre-lockdown) to close to 90 lakh in January 2021, indicating the platform’s preference among our core customer segment, largely rural masses,” said Ashish Ahuja, COO, Fino Payments Bank.

A recent report by PayNearby too said there was a rise of 96 per cent and 27 per cent in volume and value respectively in AePS withdrawals (Aadhaar ATMs) at kirana outlets across the country during the lockdown.

“This growth was a direct result of the various relief funds disbursed by the government to support citizens during the pandemic and was primarily led by rural and semi-urban areas, which witnessed a growth of 61 per cent and 60 per cent in transaction volumes,” it further said.

Six types of banking transactions including cash deposit, cash withdrawal, balance enquiry, mini statement, Aadhaar to Aadhaar fund transfer, Authentication and BHIM Aadhaar Pay can be done through AePS.

A recent report by NPCI and PRICE highlighted its further potential. “With over 80 per cent households receiving SMS from banks on updates about transactions in their bank account, they can make transactions with AePS for cash withdrawal, etc,” said the Digital Payments Adoption in India 2020 report.

Ahuja said people who have used AePS platform for the first time have largely continued using it.

While there have been concerns about authentication failure, bankers say it the biometric authentication is re-attempted and the transaction is usually successful.

“It is like a debit card problem at an ATM,” noted a player.

Ahuja said AePS transaction failures are largely driven by two reasons - fingerprint biometric failures and timeout.

To tackle this problem, Fino has introduced IRIS scan authentication to improve the success rate. It is also a part of the pilot working on facial recognition authentication.

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