In emerging markets, the high costs of last-mile services delivery function as a barrier to building a widespread financial services network. Agency banking provides an ideal way to help banks and other financial services providers to expand financial services and improve customer service whilst maintaining operational efficiencies.
FSS Aadhaar Enabled Payment System (AEPS), an agency banking solution, enables banks to improve the supply of financial services and bring quality banking services to the customer’s doorstep. FSS Aadhaar Enabled Banks’ points of presence are no longer limited to physical brick and mortar infrastructure branches or ATMs.
This brings an entirely new segment of underserved clients, who often face the most acute barriers to access into the formal financial services mainstream.
The operation of FSS Aadhaar Enabled Payment System is based on agents performing transactions on behalf of enrolled customers using a portable terminal - tablet, micro-ATM or a mobile device. Aadhaar Enabled Payment Service (AEPS) uses Aadhaar Data and Biometric authentication instead of signature or debit card information of the customers. Customers can initiate transactions with the Aadhaar (India’s national identity) number and their biometric or using a card and associated PIN. Basic banking services can be made available at local shops, markets and even post offices.
Easy Onboarding and Management
Agents can be onboarded by the bank in a few simple steps. For onboarding customers, the system utilizes the central Aadhaar-based platform. The data already available in the central system helps banks skip traditional KYC processes, saving time and costs. eKYC services carried out by agents involve a simple process of capturing biometrics using a scanner attached to the device, or verification of a passcode on an Aadhaar linked mobile, to instantly enroll a customer and activate a new savings account and card issuance without paperwork.
An easy to use portal allows banks to define agent relationships, their commissions, transaction limits, access rights and monitor their performance. This helps banks plan and operate the geographical spread of agents across various access points for better customer reach and profitability, especially in areas where other banks have a limited number of branches.
Cost-Efficient Transaction Switching
FSS Aadhaar Enabled Payment System (AEPS) offloads traffic from the Switch, saving costs of opening and maintaining entry-level, no-frills accounts for the financial service provider. For the card-based transactions, banks can interface with the Switch or they have an option to interface with the bank’s CMS host for authorizing PIN transactions. For on-us Aadhaar-based transaction the system integrates with the bank’s Core Banking host. For off-us transactions initiated using the Aadhaar number, AEPS integrates with the central AEPS network for transaction switching.
Convenient, Simple Payments
FSS AEPS helps banks deliver banking services to the underserved at their doorstep via micro ATM, tablets and mobile devices. The system supports debit cards, magnetic stripe cards, virtual cards and also securely processes cardless transactions. A transaction can be completed using a card and PIN or with only the Aadhaar number and a digital scan of the customer’s fingerprint for authentication.
The agent receives a notification on his device on the status of every transaction. A confirmation receipt can be printed at the micro-terminal and issued to customers to guarantee the success of transactions adding to their convenience.
Agent-assisted financial transactions supported by the system include:
- Money transfer from one Aadhaar-enabled account to another
- Account deposits
- Cash withdrawals
- Bill payments
- Loans disbursements
Non-financial transactions supported include:
- Balance enquiry
- Print out of Mini-statements
- PIN change
Risk Free Transactions
Banks can configure risk parameters to identify transaction patterns that may indicate any unusual activity.
Banks can set limits on:
Value and volume of transactions originating from an agent terminal, card and customer account.
The systems report and block suspicious transactions based on the risk threshold rules configured. Allows banks to block transactions from a suspect terminal or a bank account number to prevent the recurring incidence of fraud
Minimum and maximum value allowed per day and per month for each transaction type - cash withdrawal, deposit and fund transfer.
API-led Connectivity for Innovation
The solution can be easily extended in the future to meet new business needs. Third-party applications can easily and securely access API services available for banking transactions such as:
- Cash withdrawal
- Cash deposit
- Balance enquiry
- Fund transfer
FSS AEPS provides customizable transaction reports across terminals, cards, transaction types, and accounts to track agent performance and identify service adoption trends and patterns.
In addition, FSS AEPS can integrate with FSS Paynalytix As-a-Service for:
Sales and Marketing Decisions
Match products, offers and incentives to customer transactional patterns to lift overall revenues.
Real-time monitoring to identify transaction patterns that may indicate unusual or suspicious activity.
Agent and Customer Risk Scoring
Identify the risk level associated with a new agent or a customer by efficiently capturing due diligence information as well as ongoing monitoring to build and continually update the agent’s and the customer’s risk score within a “risk profile” for each entity.
Data Protection and Security
The solution implements a range of security measures to ensure data and
users are protected at every point during the transaction.
Two-factor authentication for all Aadhaar-based transactions using biometrics and OTP
End-to-end encryption based on industry standards
Does not store any sensitive customer information locally like PIN or Password
Auto locks micro -ATMs when idle
Ensures agents and their devices are tightly coupled so only an authorized agent can operate the device
Compliance with UIDAI standards for security
Supports Aadhaar-based biometric authentication provides maximum security to transactions
Adheres to OWASP policies and is PCI-DSS Standards Compliant
Benefits to Banks
Specific benefits of FSS AEPS for key stakeholders include:
Expands Customer Portfolio
Help banks broaden service coverage and penetrate the ‘undeserved’ market segments
Generates new revenue streams from fee per transaction
Offloads traffic from the Financial Switch, saving millions of USD in maintenance of low-cost, no frills accounts
Lowers customer acquisition costs by supporting electronic KYC
Lowers agent onboarding costs via integration with Aadhaar eSign
Saves on branch infrastructure and manpower costs
Improves branch staff productivity indirectly by lowering number of footfalls
Assured Peace of Mind
Highly configurable system with standard interfaces to integration with all delivery channels like Micro ATMs, Tablets and Mobile POS as well as with any backend Banking systems
Mitigates incidence of risk via optional integration with Paynaltix As-A-Service
Offers Flexibility of Commercial Models
FSS AEPS is available as a licensed solution, managed service, hosted on public or private cloud
Benefits to Agents
Creates livelihood opportunities for agents through commissions and fees and the capability to upsell and cross-sell services
Generates sales from additional footfalls into the store
Benefits to Customers
Accessible and Convenient Services
Improves access to financial services, enables users to build transaction profile and history to avail services such as loans
Saves opportunity costs as customers no longer need to forego daily wages to visit a branch for routine financial transactions
Improves safety by moving funds from “under the mattress” to bank accounts