AePS gets a new use case: You can now deposit cash directly into someone else’s bank account

The Aadhaar-enabled Payment System (AePS) is expanding beyond its traditional cash-withdrawal and self-deposit functions. A new three-party cash deposit service introduced by the National Payments Corporation of India (NPCI) will allow a person to deposit cash directly into the Aadhaar-linked bank account of another registered beneficiary through an authorised agent.

Spice Money has announced the rollout of the service through its network of more than 16 lakh Adhikaris. The move could make cash-based remittances more convenient, particularly for customers in rural and underserved areas where access to bank branches may be limited.

What changes with three-party AePS?

Under the traditional AePS cash deposit model, a customer can deposit cash into their own bank account through an AePS-enabled banking point. The three-party facility changes this by introducing a beneficiary into the transaction.

For example, a customer carrying cash can visit a Spice Money Adhikari and deposit the money into the bank account of a registered family member or another beneficiary. The recipient does not need to be physically present at the agent point for the deposit.

The transaction uses Aadhaar-based authentication and beneficiary verification. The service is also designed to enable interoperable cash deposits across participating banks, allowing customers to use the facility even when the sender and beneficiary have accounts with different participating banks.

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Why does this matter for customers?

The development is particularly relevant for households that continue to depend on cash for income and transactions but increasingly use bank accounts to receive and store money.

Consider a person who earns or receives cash in one location and wants to send money to a parent or another family member. Instead of travelling to a bank branch or finding another way to transfer the money digitally, the customer can use an assisted banking point to deposit the cash directly into the beneficiary’s bank account.

This gives AePS a new role in person-to-person money movement, rather than limiting it primarily to accessing one's own bank account.

AePS takes a different route from UPI

The new service also highlights the different ways in which India’s digital public infrastructure is addressing financial access.

UPI has largely driven smartphone-based digital payments, while AePS uses Aadhaar authentication and assisted banking points. This makes AePS particularly relevant for customers who may have limited access to smartphones, reliable internet connectivity or conventional banking infrastructure.

Dilip Modi, Founder and CEO, Spice Money, said, “Technology and India’s digital public infrastructure are fundamentally changing how people access financial services.. AePS is connecting people to their banks through Aadhaar, allowing them to withdraw cash, deposit cash and access essential banking services at merchant points close to them. Just as UPI is driving payments convenience through smartphones, we are driving banking convenience through Aadhaar and bank accounts. The three-party cash deposit service takes this a step further by enabling people to deposit cash into the bank accounts of their family members and other beneficiaries through a Spice Money Adhikari close to them.”

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What does it mean for last-mile banking?

For Spice Money, the rollout expands the range of financial services available through its 16 lakh-plus Adhikari network and creates another potential earning opportunity for its last-mile partners.

For customers, the bigger change is the ability to convert physical cash into a deposit in another person’s bank account through an assisted, Aadhaar-enabled channel.

The service therefore sits at the intersection of India’s cash economy and its expanding formal banking infrastructure. If scaled across participating banks and agent networks, three-party AePS could make domestic cash remittances more accessible, particularly in parts of the country where a bank branch or fully digital payment option is not always within easy reach.

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