Banks are always on the lookout for innovative ways to make payments, reduce expenses and provide convenience to their customers through compliance and security. Financial institutions also look for customer friendly and secure payment solutions to safeguard themselves from fraudulent transactions. An example of such a solution is the Aadhaar Number Enabled Payment System, abbreviated as AEPS. The government of India is promoting this form of payment to encourage the use of digital payments rather than cash transactions. It is particularly suited for people who are uncomfortable with using mobile wallets or cards for payments. In this form of payment, biometrics and the Aadhaar number are used to authenticate transactions, instead of plastic cards or mobile phones.
AEPS requires clients to link their bank accounts to Aadhaar. Aadhaar is utilized as an identity to access the account and carry out banking transactions. When customers choose to use this facility, they do not have to carry their cards or remember/use the PIN. All that is needed to carry out the transaction is their thumb impression.