We are all aware of the situation of rural areas in India. In the generation of cashless India, there are still some places where people are not able to even use banking services properly.
India is a developing country; therefore rural areas are also developing. There are enough electricity and light but banks and ATMs are still situated in far places.
Aadhaar Enabled Payment System (AEPS) is playing a vital role in providing basic banking services in rural areas. There is no need to cover the long distances for banks and ATMs.
Banking Infrastructure in India
We know that the banking infrastructure in India is limited. For every 100 crore Bank account holders, there are only 1 Lac of Bank branches and approx. 2 Lac ATMs.
AEPS has played a vital role in eliminating the problem of fewer bank and ARM branches in India.
Now bank transactions can be done at any nearby shop providing AEPS services. People found AEPS very helpful as it allows them to perform various transactions including cash withdrawal, cash deposit, mini statement, balance inquiry, etc.
Increase in AEPS transactions after Demonetization
After the demonetization, digital transactions were increased eventually. It was expected that people will get used to using less cash and more digital payment options.
Gradually, the use of plastic cards for digital transactions seems to have slowed down. The number of transactions done through AEPS has been increased.
AEPS is an ideal solution for rural people who are not digitally literate. The cost of providing AEPS service through retailers I much lower than opening a fully functional bank branch.
This is the reason which is responsible for encouraging more and more AEPS service providers in India.
AEPS is particularly helpful in addressing the problems that people are facing in rural and semi-urban areas, where the ATM and bank network is not as strong currently.
Trending use of AEPS in rural areas
The trend of AEPS has been quite encouraging in rural areas. The total number of AEPS transactions has increased in the last 2 years. The statistics of the year 2017 tells that AEPS transactions were 40 million in May, 55 million in June, and 78 million in July.
The success and smooth functioning of AEPS also depend on the working and efficiency of the banks.
People in rural areas are adopting AEPS service very effectively. They found it easy and helpful because AEPS provides 24*7 access.
Apart from providing bank facilities, AEPS is also helpful in generating employment and entrepreneur opportunities. AEPS service providers are earning a good income while providing services to customers.
There is no need for some specific educational degree to convert a small shop into a mini ATM. All you need is an Aadhaar card linked with the respective bank account.
To perform any bank transaction, a customer needs to visit the AEPS service provider at a nearby shop. Provide his/her Aadhaar number and scan the finger on the fingerprint scanner attached to the device.
After successful authentication, select the transaction type and enter the amount. A customer also gets a transaction slip after every successful transaction.
Banks and ATMs were closed during the lockdown, this is the reason why AEPS transactions have been increased during this period.
Conclusion
AEPS is proven to be helpful in encouraging a cashless society in India. AEPS is easy to use which is why a large number of people are adopting it.
No bank branches and ATMs → AEPS → Easy way of banking → Easy to operate → More digital payments→ Cashless society → Development of India.