Aadhaar-enabled Payments Rise Over Six-fold to 6 Million in April
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ram@justransact.com
03-07-2017 00:00:00
Aadhaar-enabled Payments Rise Over Six-fold to 6 Million in April

Aadhaar Enabled Payments Systems (AEPS) which is aimed at promoting digital payments in rural India, has risen more than six-fold within the five months of the currency swap, says a media report.

 

The AEPS was initiated by the government under the umbrella organisation National Payments Corporation of India (NPCI) to move the country towards the digital economy. It allows people to make digital payments where smartphone-based payments cannot work using the Aadhaar authentication at Point of Sale (PoS) or micro ATMs.

 

The AEPS transactions reached more than 6 million in April against less than a million in October, a month before demonetisation was announced, according to NPCI data.

 

“Banks have already deployed around 1.3 lakh micro ATMs in the country, of which more than 1 lakh terminals are interoperable,” AP Hota, chief executive officer of National Payments Corporation of India (NPCI) told Economic Times.

 

The date shows a rise in financial inclusion as the number of transactions increased to 6.1 million in April from about 2 million transaction in December.

 

An AEPS transaction requires an interoperable micro ATM, which allows customers to use any bank account to transact on any device like ATMs, where cards of any bank can be used on any machine.

 

Such payments reduces the complexity of transactions that require one time password (OTP) and password.

 

"Aadhaar-based payments is the right technology for rural India where literacy about security features for digital payments like OTP and password are lacking,” Hota added.

 

According to Economic Times, Hota said that the success of the AEPS programme lies in the ability of the regional rural banks (RRBs) to deploy such solutions for their customers.

 

“We already have 53 RRBs offering interoperable AEPS services out of the total 56, and our target is to make all of them interoperable as soon as possible,” Hota told Economic Times.  

 

Apart from allowing digital payments in rural India, micro ATMs facilitates banks to take banking to rural India in a cost-effective manner.

 

“The cost-to-serve through a micro ATM is lower than that of a traditional bank branch. Hence, this network can be quickly ramped up and can enable digital financial inclusion at scale,” Rajiv Lall, the founder chief executive officer of IDFC Bank told Economic Times.

 

IDFC Bank, which has deployed around 4,139 micro ATMs in the country for AEPS transactions, plans to increase the number to 30,000 terminals and another 75,000 Aadhaar Pay merchants over the next two years, Economic Times reported.

 

However, around 70 percent of these digital transactions are still for only cash withdrawal or deposits and the rest for balance enquiry and fund transfer.

-K Ramanathan ram@justransact.com


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