Strategy Aadhaar enabled payment system growth slows in FY20 December 3, 2019December 3, 2019 Pratik bhakta The rate of growth in transactions through Aadhaar-enabled payment system (AePS) in the April-October period of the current financial year has dropped by more than two-thirds from the year-ago period, data from National Payments Corporation of India (NPCI) shows. AePS facilitates cashless transactions through biometric authentication. According to NPCI, which runs the platform, biometric-based transactions grew by 10% to 208 million transactions in October 2019 from 189 million in April. Further, the transactions dropped in November to 196 million. In the year-ago period, the growth was more than 32% – transactions had jumped to 150 million in October compared with 113 million in April. Even last year in November, transactions had fallen to 137 million. A further consideration of the trends shows that interoperable transactions – ones undertaken by customers of one bank on the terminals deployed by another bank – have grown at a slower pace. As per NPCI data, between April and October, the number of such transactions grew at 3.5% compared with almost 50% in the same period of the previous year. “The transaction count on AePS has not grown aggressively, given many large public sector banks have introduced limits on the number of transactions their customers can do on other terminals,” a senior banker said, requesting not to be named. ET had reported on October 3 how large public sector banks such as State Bank of India and Bank of Baroda have limited number of transactions their customers can do on other bank micro ATMs. Among other reasons, bankers said some agents were splitting single transactions into multiple small ones to earn more commission, which is why such limits were imposed. The total number of such transactions decreased to 70 million in October from 82 million in August, which is when the limitations kicked in. On the other hand, in the first six months of last fiscal, these transactions had jumped almost 50%, clocking 48 million in October compared with 30 million in April. October usually sees high transactions because of the festive season and higher remittance from urban to rural areas. “AePS in the past month (October) saw a lot of withdrawals of funds sent by families in rural areas owing to the festive season, a rise in direct benefit transfer (DBT) withdrawn by people is… a healthy indication as it implies higher penetration of financial services in the remote areas,” said Anand Kumar Bajaj, chief executive officer, PayNearby. AePS has faced multiple issues around interoperability since most of the micro ATM terminals used for such transactions have been deployed by new-age banks while the customers mostly held accounts with PSBs.