Aadhaar-Enabled Payment System:
The Aadhaar-enabled Payment System (AePS) in India has recently faced exploitation by cybercriminals, leading to unauthorized access to users’ bank accounts.
- Scammers have been using leaked biometric details to bypass the need for One Time Passwords (OTPs) and drain funds from unsuspecting victims.
- A series of recent scams have exposed the vulnerabilities of the AePS and how cybercriminals are exploiting the loopholes in the system to defraud unsuspecting customers.
- The AePS is a bank-led model that allows online interoperable financial transactions at Point of Sale (PoS) or micro-ATMs through the Business Correspondent (BC) of any bank using the Aadhaar authentication.
- It was taken up by the National Payments Corporation of India (NPCI) – a joint initiative of Reserve Bank of India (RBI) and Indian Banks’ Association (IBA).
- The AePS is meant to provide easy and secure access to banking services for the poor and marginalized sections of society, especially in rural and remote areas.
- It eliminates the need for OTPs, bank account details, and other financial information.
- Transactions can be carried out with only the bank name, Aadhaar number, and captured fingerprint during Aadhaar enrollment.