Aadhaar-enabled Payment System

• Context (TH): In 2023, Aadhaar-enabled Payment System (AePS) frauds accounted for 11% of cyber-financial frauds originating in India, as per the Indian Cybercrime Coordination Centre (I4C).
• The central government’s cybercrime portal (cybercrime.gov.in) and the 1930 helpline received 1,310,329 complaints about cyber-related financial frauds. This included AePS frauds where biometrics were cloned.
• The scams involve cloning people’s Aadhaar-linked biometrics. This is done by using silicon fingerprints and unauthorised biometric devices.

What is AePS?

• AePS, or Aadhaar-enabled Payment System, is a financial service in India that allows customers to carry out banking transactions using only the bank name, Aadhaar number, and fingerprint.
• It eliminates the requirement for OTPs and the necessity to input bank account information and other financial details.

Types of Services Available under AEPS

Issues related to Aadhaar in India

• Privacy Issues: Concerns about the potential misuse of Aadhaar data. For example, leak in biometric information.
• Authentication Errors: leading to the exclusion of individuals from essential services.
• Centralisation of personal data makes it a potential target for cyber-attacks.
• Excessive Government Surveillance: Due to the extensive use of Aadhaar in public and private transactions.
• Concerns about the involvement of foreign entities in Aadhaar-related projects and potential risks associated with international data sharing.