Aadhaar Enabled Payments: Taking banking services to the doorsteps of the underserved
New banking service delivery models are helping to create a populace ready to adopt new-age financial products. Doorstep banking services using Aadhaar Enabled Payment System Solution (AEPS) is a new technological advancement that has helped India Post Payments Bank (IPPB) to bridge the digital divide. The total transaction value processed by the AePS system has crossed the Rs 8,000-crore mark, indicative of IPPB’s scale and its ability to successfully tap into latent demand for financial products amongst hitherto underserved segments.
IPPB was set up by the government with a motive to take banking services to the unbanked section of the society. In rural and peri-urban areas, the average time to reach a banking access point is 1.5 to 5 hours, compared to the average of 30 minutes in urban areas. FSS Technologies has partnered with the IPPB to offer financial services at the last mile through interoperable, affordable services. This partnership aims to bring millions of unbank-ed customers into the financial mainstream. Currently, there are nearly 410 million Jan Dhan accounts in India and since launching AEPS services, the bank has become the single largest platform in the country for providing interoperable banking services to customers of any bank.
IPPB has deployed FSS Integrated Payment Stack to deliver digital payments products to its customers. This includes FSS Payments-in-a-Box, Aadhaar-enabled payments (AePS and Aadhaar Pay for merchants), bill payments, UPI payments, card payments, merchant payments (PoS and online).
“The current financial services delivery infrastructure created by India Post Payments Bank spans 1160,000 villages and 400,000 digital points and addresses the accessibility challenges faced by customers in the traditional banking ecosystem,” says K. Srinivasan, global chief revenue officer, FSS Technologies. “However, a combination of simple-to-use technology, along-with the ability to leverage the existing postal network and the inherent interoperability offered by the AePS payments infrastructure has helped us deliver services to customers at their doorstep,” he adds.
The operation of FSS’ AePS solution is very simple and requires zero investment on part of the customer. The service is based on agents performing transactions on behalf of customers using a tablet, a micro-ATM or a POS device. Customers of any bank can access their Aadhaar-linked bank account by simply using their fingerprint for cash withdrawal, balance enquiry and transfer of funds into an operating IPPB account, right at their doorstep. “Building an Atmanirbhar, digitally inclusive India is the fundamental tenet guiding the IPPB-FSS partnership.
The Covid-19 health emergency is propelling a massive shift toward digital markets and digital finance The transaction account and basic banking services offered via AePS has helped address institutional supply side constraints. The basic transaction account functions as a gateway and potentially opens an entirely new market for a range of asset-based and liability-based financial products – micro-insurance, micro-investments, micro-loans,” Srinivasan concludes.