The National Payments Corporation of India (NPCI) on June 12, 2026, issued circular on Introducing step-up authentication for Cash Withdrawal & BHIM Aadhaar Pay transactions carried out through Aadhaar Enabled Payment System ("AePS").
The circular introduces enhanced security measures for cash withdrawal (CW) and BHIM Aadhaar Pay (BAP) transactions conducted through AePS touchpoints such as Business Correspondents and merchants. Currently, such transactions rely solely on Aadhaar-based biometric authentication. To strengthen consumer protection, an additional layer of authentication has been mandated for higher-value transactions.
As per the new guidelines, all CW and BAP transactions exceeding INR 5,000 must undergo Aadhaar-based OTP authentication in addition to biometric verification. This OTP will be sent to the mobile number registered with UIDAI, and the transaction will only be processed upon successful authentication. This step-up mechanism aims to mitigate fraud risks associated with higher-value transactions.
Further, acquiring members are required to capture and transmit the OTP along with the customer’s biometric data within the Personal Identity Data (PID) block while sending the transaction request to NPCI. The updated process flow has been detailed in the annexure to the circular for implementation clarity.
All acquiring members must implement the necessary system changes in their AePS applications by June 30, 2026. Additionally, the INR 5,000 threshold may be revised in the future based on evolving fraud patterns and risk assessments, making it important for stakeholders to stay aligned with regulatory updates.
[Notification No. NPCI/2026-27/AePS/001/096]
