Aadhaar-enabled payment system has witnessed several instances of decline in transactions
In these digital times, an average customer is now spoiled for choice in terms of payment options as having cash in the pocket is fast becoming an out of date.
What to say about cash payments, at the rate at which digital payment options are increasing, even the “modern” way of paying via credit and debit cards is fast becoming extinct.
Among the various modes of digital payments, the government is promoting Aadhaar Enabled Payment System or AEPS. It is mostly used by the beneficiaries of centrally sponsored schemes for subsidy payments.
What is AEPS?
Aadhaar Enabled Payment System (AEPS) is a bank-led model that enables online inter-bank financial transactions in accounts including accounts of beneficiaries of Direct Benefit Transfer (DBT) through Business Correspondents (BCs) using Aadhaar-based biometric authentication. allows for.
Banks provide this service to their customers to access their respective Aadhaar enabled bank account and perform basic banking transactions like cash deposit, cash withdrawal, intrabank or interbank fund transfer, balance enquiry and receiving mini statement through BC.
What are the issues affecting this system?
There has been an increase in complaints of failure of transactions under this payment system, which has forced the government to adopt various measures to reduce the number of declines.
The National Payments Corporation of India (NPCI) has said that it has taken several steps to mitigate the fall.
Steps to check cases of declining transactions
NPCI has a 24×7 technical support team including a network team, which tracks the incidents and assists the banks in closing the incident.
NPCI takes the matter to the senior management of banks if they are having more than one lakh transactions per day.
A technical task force has been created for all online products to help banks work towards mitigating the technical fallout. In addition, regular reviews are also conducted by the Government from time to time to prevent technical degradation of AEPS transactions.
Intervention by RBI
RBI has conveyed that in order to strengthen the BC ecosystem, it has prescribed the framework for development of Business Correspondent Registry Portal to Indian Banks’ Association (IBA).
The BC Registry Portal provides a centralized repository of relevant information on the BC, which captures the basic demographic details, relevant bank and corporate BC details along with the location of the BC, nature of operations, qualifications, gender etc.
In the event of any malpractice or fraud, banks have the option to blacklist the BCs on the portal, details of which are made available to all stakeholders. The details of all business correspondents that are blocked or blacklisted are consolidated by NPCI and circulated from time to time to all the member banks for the benefit of the BC ecosystem.