The government-backed Aadhaar Enabled Payment System (AEPS) is finally catching up with India’s rural population, the very segment it is aimed at, with transactions growing six-fold since demonetization. AEPS transactions crossed 6 million in April, according to data from the National Payments Corporation of India (NPCI) – the creator of the payments service. Before demonetization, transactions stood at less than a million.
AEPS transactions, more than two-thirds of which are cash withdrawals, are driven by micro ATMs deployed by all major banks across rural India, where other modes of digital payments don’t work. “Banks have already deployed around 1.3 lakh micro ATMs in the country, of which more than 1 lakh terminals are interoperable,” AP Hota, CEO of NPCI told ET. Interoperable micro ATMs allow customers to use any bank’s account to make a transaction on any device. This reduces entry barriers and increases adoption. ALSO READ: Digital India: Aadhaar-based Digi Pay app now used by 22,000 village entrepreneurs
AEPS allows four kinds of transactions: cash deposit, cash withdrawal, balance enquiry and Aadhaar-to-Aadhaar funds transfer. In order to do a transaction, the rural customer has to only identify the bank he is associated with and provide his biometric details. NPCI says on its website that this is the first step towards “building a full range of Aadhaar-enabled banking services” and “facilitating inter-operability across banks in a safe and secured manner.”
NPCI, meanwhile, surpassed 10 million transactions on its United Payments Interface (UPI) platform last month in less than a year of its launch. Out of the total UPI transaction volume, about 22 per cent are merchant-based. “Transactions on UPI is growing exponentially due to increased acceptance among member banks, merchants and consumers,” AP Hota, MD & CEO, NPCI, said in a statement. UPI user-base is estimated to reach a 100 million in a few years. ALSO READ: Digital India: UPI-based transactions grew more than 20 times since demonetization