Aadhaar Enabled Payment System records 2.65mn transactions worth Rs 316cr in January

Aadhaar Enabled Payment System (AEPS) based financial transactions have seen around 2.65mn transactions in January 2017.

Aadhaar Enabled Payment System (AEPS) based financial transactions have seen around 2.65mn transactions in January 2017 and the value of these transactions is around Rs 316 cr, according to a report by the National Payments Council of India (NPCI). In December 2016, these numbers were at 1.97mn and Rs 207 cr respectively.

This is a growth of almost 34.5 percent in terms of number of transactions and a 52.7 percent increase in the value transacted over last month. As compared to April 2016 which had 0.08mn transactions at a value of Rs 19 cr. That's a whopping 3200 percent increase in terms of number of transactions. For the financial year FY2015-16, the total volume of transactions stood at 0.36 mn with a value of Rs 86 crore transacted. So we have clearly come a long way.

AEPS lets you transact - interbank cash withdraw or deposit, balance enquiry, as well as interbank funds transfer. But these numbers are purely to do with cash withdrawal and deposit.

Aadhaar Enabled Payment System records 2.65mn transactions worth Rs 316cr in January

In fact, the January 2017 data for the AEPS financial transactions is a record figure both in terms of the number of transactions as well as the value transacted.

AEPS 2

The AEPS financial transactions have taken off thanks to the demonetisation drive on 8 November last year. In terms of value of transactions, there was a spike in October 2016, before the demonetisation drive kicked in in November.

The spike in October could also be attributed to festival season. December 2016 also saw less value transacted even though the volume of AEPS transactions was significantly higher than October and November 2016. This can be attributed to the fact that a lot of the transactions may have been for small value products and services as AEPS is a system which has become a lot more mainstream now since demonetisation.

Image: IDFC

Image: IDFC

Thanks to the the government moving towards a less cash economy, even the banks have jumped on to the bandwagon. By December, around 119 banks were supporting AEPS and more banks are expected to be added on the platform as well. UIDAI has also announced that it will be launching an AEPS Android app to boost cashless transaction. Developed in collaboration with TCS, the application can be downloaded by the merchants, who will need a smartphone and a fingerprint scanner to use it. Transactions on this application can be done without any card or PIN.

In late December, Chief Minister of Andhra Pradesh, launched the Aadhaar Pay for Merchants app as implemented by IDFC bank at a fair price shop. The system included a fingerprint scanner for the merchant, which costs about Rs 2,000. A smartphone is necessary to authenticate the biometric identification, but the application is not publicly available on the Play Store. Instead, a link to download the application is sent over sms to the merchant.

https://twitter.com/ncbn/status/812647581226409988

Unique Identification Authority of India has indicated that it will be rolling out Aadhaar Pay app for merchants in the coming weeks, for four additional banks including the State Bank of India. The program has been running as a pilot project in fair-price shops in Andhra Pradesh, according to a report in The Economic Times. The app will be based on Aadhaar-enabled payment system (AEPS) which is already being used by micro ATMs across the country.

So for all practical purposes, the volume of AEPS transactions and the value transacted will be seeing an upward swing as more banks and merchants support AEPS and make it more mainstream.

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