The Reserve Bank of India has proposed streamlining the process for on-boarding of Aadhar-enabled Payment System (AePS) service providers and introducing additional fraud risk management measures, in order to strengthen the security and enhance the robustness of AePS.
The proposed streamlining will include mandatory due diligence, and will initially be intrdocued for AePS touchpoint operators, followed by banks. The central bank will issue instructions on the same shortly.
In the policy conference, Deputy Governor T Rabi Sankar said that since most AePS transactions happen in rural and Tier II+ cities, the initiative has been taken to ensure the safety of these transactions.
As in the case of additional factor of authentication, RBI we can use various technologies to do it such as allowing the customer to ‘switch on’ permission for transactions rather than it being pre-set, or some sort of ‘geo limits’.
“The RBI places a lot of emphasis on the security of digital transactions which we believe is key to ensuring customer adoption, especially customers who are not savvy digitally. This is tan effort in that direction to improve the security of transactions,” he said, adding that all touch point operators will go through a standardised, safe and secure onboarding process.
Operated by National Payments Corporation of India (NPCI), AePS enables customers to perform digital payment transactions in assisted mode. In 2023, more than 37 crore users undertook AePS transactions.
“The recent measures undertaken by NPCI in December 2023, mandating Aadhaar-based biometric authentication for business correspondents (BCs) and agents, further underscore the commitment to ensuring the integrity and security of the AePS platform,” he said adding that AePS recorded around 43.31 crore transactions in January 2024 and remains vital in facilitating access to essential government subsidies and benefits,” said Sanjeev Kumar, Co-Founder, Executive Director and CEO, Spice Money.