Skip to main content

Due Diligence of AePS Touchpoint Operators

Reserve Bank of India (RBI) has issued directions on due diligence of Aadhaar Enabled Payment System (AePS) touchpoint operators.

What is Aadhaar Enabled Payment System (AePS)?

Aadhaar Enabled Payment System (AePS) is a payment system in which transactions are enabled through Aadhaar number and biometrics / OTP authentication providing financial services such as cash withdrawal, cash deposit, fund transfer, and non-financial services such as mini statement and balance enquiry, etc.

AePS is a payment system operated by National Payment Corporation of India (NPCI) that facilitates interoperable transactions using Aadhaar enabled authentication. 

What is AePS touchpoint?

AePS touchpoint is the terminal deployed by acquirer banks to facilitate AePS transactions, which shall include both mobile and fixed points.

Who is AePS Touchpoint Operator (ATO)?

AePS Touchpoint Operator (ATO) is the individual onboarded by the acquiring bank who operates the AePS touchpoint.

What is the rationale behind the directions?

There have been reports of frauds perpetuated through AePS due to identity theft or compromise of customer credentials. To protect bank customers from such frauds, the directions have been issued streamlining the process for onboarding of AePS touchpoint operators and strengthening fraud risk management. 

What are the directions for onboarding and due diligence of AePS touchpoint operators?

  • The acquiring bank shall carry out due diligence of all ATOs before onboarding them. 
  • The acquiring bank shall also carry out periodic updation of KYC of ATOs.
  • In cases where an ATO has remained inactive, i.e. has not performed any financial / non-financial transaction for a customer for a continuous period of 3 months, acquiring bank shall carry out KYC of ATO before enabling him / her to transact further.
  • The acquiring bank shall monitor the activities of ATOs through their transaction monitoring systems on an ongoing basis and set operational parameters, based on business risk profile of the ATOs. 
  • Aspects such as location and type of the ATO, volume and velocity of transactions, etc. shall form part of bank’s fraud risk management framework.
  • The operational parameters regarding ATOs shall be reviewed on a periodic basis, reflecting emerging fraud trends.
  • The acquiring bank shall put in place adequate system level controls to ensure that any technological integrations like APIs are used only for enabling AePS operations.

From when shall the directions be applicable?

The directions shall come into effect from January 01, 2026.


References

Reserve Bank of India. (2025, June 27). 'Aadhaar Enabled Payment System – Due Diligence of AePS Touchpoint Operators'. Retrieved from https://website.rbi.org.in/web/rbi/-/notifications/aadhaar-enabled-payment-system-due-diligence-of-aeps-touchpoint-operators

Reserve Bank of India. (2025, June 27). 'RBI issues directions on Due Diligence of Aadhaar Enabled Payment System (AePS) Touchpoint Operators'. Retrieved from https://website.rbi.org.in/web/rbi/-/press-releases/rbi-issues-directions-on-due-diligence-of-aadhaar-enabled-payment-system-aeps-touchpoint-operators


Follow at - Telegram   Instagram   LinkedIn   X   Facebook

Labels:

Comments

Post a Comment

Popular Posts

Amendments in / additions to forex guidelines

Reserve Bank of India (RBI) has amended various forex guidelines. This article lists out some of the such recent amendments. What are the updates in the existing guidelines? Previous guidelines Revised guidelines Persons resident outside India that maintain a rupee account in terms of regulation 7(1) of Foreign Exchange Management (Deposit) Regulations, 2016 may purchase or sell dated Government Securities / treasury bills. The amount of consideration paid for the purchases shall be out of the funds held in the said rupee account. Persons resident outside India that maintain a rupee account in terms of regulation 7(1) of Foreign Exchange Management (Deposit) Regulations, 2016 may purchase or sell dated Government Securities / treasury bills and non-convertible debentures / bonds and commercial papers issued by an Indian company. The amount of consideration paid for the purchases shall be out of the funds held in the said rupee account. The balance...
Post a Comment
Read more

FX Global Code

Reserve Bank of India (RBI) has signed its renewed Statement of Commitment (SoC) to the FX Global Code.  What is FX Global Code? FX Global Code is a set of global principles of good practice in the foreign exchange market. The Code contains 55 principles that provide a common set of guidelines to promote the integrity and effective functioning of the wholesale foreign exchange market. The principles cover ethics, governance, execution, information sharing, risk management and compliance as well as confirmation and settlement. The establishment of the Code was facilitated by the Foreign Exchange Working Group (FXWG), which operated under the auspices of the BIS Markets Committee.  The Code was developed by a partnership between central banks and market participants from around the globe and was first published in 2017. The Code promotes a robust, fair, liquid, open, and appropriately transparent market in which a diverse set of market participants, supported by resilient infras...
Post a Comment
Read more

Nomination for demat accounts and mutual fund folios

Securities and Exchange Board of India (SEBI) had revised the guidelines on nomination for demat accounts and mutual fund folios.   Which entities are covered by the guidelines? The following regulated entities (REs) are covered by the guidelines – Asset Management Companies (AMCs) of Mutual Funds (MFs) and their Registrars to an issue and share Transfer Agents (RTAs)  Association of Mutual Funds in India (AMFI)  Recognized Depositories  Registered Depository Participants (DPs) What are the guidelines on nomination facility? Nomination shall be mandatory for single holding and optional for jointly held accounts / folios. However, an investor having single holding / account / folio can opt-out of nomination, either online or through physical / offline mode. In case a joint account / folio becomes single holding, post the demise of holders, either nomination or ‘opt-out’, is mandatory. Investors shall have the option to specify guardians when nominees are minors....
Post a Comment
Read more

Nomination Facility in Banks

Reserve Bank of India (RBI) has issued directions on nomination facility in deposit accounts, safe deposit lockers and articles kept in safe custody with the banks. What is the legal framework for nomination facility in banks? Banking Regulation Act, 1949 (BR Act) contain provisions on nomination facility in banks. Section 45ZA – Nomination for payment of depositors' money  Where a deposit is held by a banking company to the credit of one or more persons, the depositor / all the depositors together, may nominate one person to whom in the event of his / their death, the amount of deposit may be returned by the banking company. Where the nominee is a minor, the depositor shall appoint any person to receive the amount of deposit in the event of his death during the minority of the nominee. Section 45ZC – Nomination for return of articles kept in safe custody with banking company  Where any person leaves any article in safe custody with a banking company, such person may nominate ...
Post a Comment
Read more

Recognition of Self-Regulatory Organisations (SROs) for Non-Banking Financial Companies (NBFCs)

Reserve Bank of India (RBI) has invited applications for recognition of Self-Regulatory Organisations (SROs) for Non-Banking Financial Companies (NBFCs). What is the basis of Self-Regulatory Organisations (SROs) for Non-Banking Financial Companies (NBFCs)? Reserve Bank of India (RBI) had issued ‘ Omnibus Framework for recognition of Self-Regulatory Organisations for Regulated Entities of the Reserve Bank ’ dated March 21, 2024, wherein broad parameters, viz., objectives, responsibilities, eligibility criteria, governance standards, application process, etc., were specified. It was also stated that other sector-specific guidelines like number of SROs, membership, etc., shall be issued separately whenever a sectoral SRO is intended to be set up. RBI has now invited applications for recognition of SROs for the NBFC sector under the aegis of the aforesaid omnibus framework.  What are the membership criteria for the SRO for NBFCs? The SRO for NBFC sector is primarily envisaged for NBFCs...
Post a Comment
Read more