The Reserve Bank of India on June 27, 2025, issued directions on Due Diligence of Aadhaar Enabled Payment System (AePS) Touchpoint Operators.
Effective January 01, 2026, for enhancing the security and robustness of the Aadhaar Enabled Payment System (AePS) to combat increasing instances of fraud.
Key highlights of the "Aadhaar Enabled Payment System – Due Diligence of AePS Touchpoint Operators" directions include:
•Introduction of AePS Touchpoint Operator (ATO): The directions formally define an AePS Touchpoint Operator (ATO) as the individual onboarded by an acquiring bank to facilitate AePS transactions at terminals (both mobile and fixed).
•Mandatory Due Diligence: Acquiring banks are now required to perform thorough due diligence on all ATOs before onboarding them. This process must align with the Customer Due Diligence (KYC) procedures for individuals as per RBI's Master Direction – Know Your Customer Direction, 2016. If an ATO has already undergone KYC as a Business Correspondent/sub-agent, that can be adopted.
•Periodic KYC Updation: Acquiring banks must also conduct periodic KYC updation for ATOs.
•Re-KYC for Inactive ATOs: If an ATO remains inactive (no financial/non-financial transactions for a customer) for three continuous months, the acquiring bank must conduct fresh KYC before allowing further transactions.
•Enhanced Risk Management: Acquiring banks must continuously monitor ATO activities using transaction monitoring systems.
Operational parameters for ATOs (e.g., location, type, transaction volume, velocity) should be set based on their business risk profile and integrated into the bank's fraud risk management framework.
These operational parameters must be reviewed periodically to reflect evolving fraud trends.
Banks need to implement robust system-level controls to ensure that technological integrations (like APIs) are exclusively used for AePS operations.
These measures are issued under the Payment and Settlement Systems (PSS) Act, 2007, to protect customers from identity theft and maintain trust in the AePS.
[Press Release: 2025-2026/619]
