RBI Proposes New Rules to Curb AePS Frauds

The Reserve Bank of India has released draft guidelines targeting the due diligence of Aadhar-enabled Payment System (AePS) touchpoint operators to curtail frauds. The guidelines propose stringent onboarding checks, risk-based transaction limits, and alternative authentication mechanisms for digital payments, emphasizing compliance within three months of finalized directives.

The Reserve Bank of India (RBI) on Wednesday issued draft guidelines addressing the necessary due diligence for Aadhar-enabled Payment System (AePS) touchpoint operators, aiming to mitigate fraud risks.

The draft rules streamline the onboarding process for AePS touchpoint operators and emphasize ongoing due diligence, according to an official statement on the central bank's website. The RBI proposes that acquiring banks conduct thorough due diligence and update the KYC of AePS touchpoint operators who remain inactive for six months.

Additionally, the guidelines mandate that AePS touchpoint operators be onboarded by only one acquiring bank and that transaction limits be set based on risk profiles. Feedback from stakeholders is invited until August 31, after which banks and NPCI will have three months to comply with the new regulations.

Yahswant Lodha, co-founder of Paynearby, praised the draft for advocating ''stringent agent onboarding checks.'' The RBI is also considering alternative authentication mechanisms for digital transactions, leveraging technological advancements to enhance payment security.