Why NPCI Disabled Your AEPS Debit Facility

In the digital age, the Aadhaar-enabled Payment System (AePS) has emerged as a significant player in India’s financial landscape. This bank-led model enables online financial transactions at Point-of-Sale (PoS) terminals and Micro ATMs using Aadhaar authentication. However, the increasing sophistication of cyber threats has made AePS a target for fraudulent activities. In response, the National Payments Corporation of India (NPCI) has taken proactive measures to enhance the security of AePS and protect its users.

Understanding AePS

AePS leverages India’s vast Aadhaar database, a 12-digit unique identity number issued by the Unique Identification Authority of India (UIDAI) to Indian residents based on their biometric and demographic data. The system enables individuals to carry out financial transactions on a Micro-ATM by providing their Aadhaar number and verifying it with their fingerprint/iris scan.

One of the key features of AePS is its interoperability. Customers of any bank can perform basic banking transactions like cash deposit, cash withdrawal, funds transfer, and balance enquiry at any AePS-enabled terminal. This user-friendly system does not require the user to remember passwords or PINs, and the use of biometric data ensures secure transactions, reducing the risk of fraud.

Benefits of AePS?

The Aadhaar-enabled Payment System (AePS) offers several benefits:

User-friendly: AePS is designed to be easy to understand and use for various financial transactions.
Biometric Authentication: The system requires the submission of biometric data (such as fingerprints or iris scans) and the Aadhaar card number for authentication, ensuring secure and reliable transactions.
Empowering the Underprivileged: AePS plays a significant role in empowering the underprivileged sections of society by providing them with access to banking services and enabling digital financial transactions.
Bank Account Privacy: Users can complete transactions without having to disclose their bank account details, enhancing privacy and security.
Convenient Access to Bank Accounts: AePS allows users to conveniently access their bank accounts using Aadhaar authentication, eliminating the need for physical bank visits.
Interoperability: AePS is not limited to a specific bank; it allows transactions across various banks, making it highly convenient.
Cost-Effective: AEPS transactions are cost-effective for both banks and users. It reduces the need for physical infrastructure and is especially beneficial for banks operating in remote areas.
Rural Empowerment: AEPS has played a pivotal role in rural empowerment by providing villagers with access to banking services without the need for extensive travel to urban areas.

These benefits make AePS a preferred choice for many individuals, particularly those who may not have access to traditional banking services.

Services Offered through AEPS

Cash Withdrawals: Individuals can withdraw cash from their linked bank accounts using AEPS. This service is particularly helpful in areas where ATMs are scarce.

Balance Inquiry: Through AEPS, individuals can inquire about their account balance in a quick and hassle-free manner.

Fund Transfers: AEPS enables fund transfers from one bank account to another, making it possible for users to send money to their family members or friends without the need to visit a bank branch.

Aadhaar to Aadhaar Payments: With AEPS, it\’s possible to make direct payments to another person\’s bank account using their Aadhaar number. This feature is particularly beneficial for merchants, traders, and small businesses.

Mini Statements: Individuals can obtain a mini statement of their recent transactions through AEPS.

Transaction Limit for AePS

The transaction limits for the Aadhaar-enabled Payment System (AePS) are as follows:

Per Transaction Limit: The National Payments Corporation of India (NPCI) has set a maximum transaction amount of ₹10,000 for a single AePS financial transaction.
Daily Limit: Some banks have implemented a daily limit of ₹50,000 on the total number of transactions.
Monthly Limit: The monthly limit for AePS transactions is ₹1 lakh.

Please note that these limits can vary based on the bank’s discretion and risk management practices

The Rising Threat

Despite its benefits, AePS has been targeted by fraudsters who have found ways to exploit vulnerabilities in the system. These fraudulent activities include the use of cloned biometrics, exploitation of system vulnerabilities, and unauthorized transactions. These instances have raised concerns about the security of AePS and prompted the NPCI to take action.

AePS Frauds

There have been several instances of fraudulent activities related to the Aadhaar-enabled Payment System (AePS). Here are a few examples:

Use of Cloned Biometrics: Cybercriminals have been known to clone individuals’ Aadhaar-linked biometrics through silicon fingerprints and unauthorized biometric devices, subsequently siphoning funds from their bank accounts.
Exploitation of Vulnerabilities: Scammers have exploited vulnerabilities in the AePS to empty bank accounts without SMS or OTP authentication.
Leaked Biometric Details: In some cases, leaked biometric details have been used to bypass the need for OTPs and siphon money from users’ bank accounts.
Unauthorized Transactions: There have been instances where unauthorized transactions were made using an Aadhaar-linked fingerprint without needing two-factor authentication.

These examples highlight the importance of implementing robust security measures to protect against fraudulent activities in the AePS.

NPCI’s Advisory and Additional Security Measures

The NPCI has issued an advisory to banks, urging them to implement additional security measures. These measures include Aadhaar-based biometric authentication of business correspondents and agents, daily monitoring to identify and halt potential misuse, and discontinuation of AePS services for inactive accounts. Furthermore, banks are instructed to promptly disable AePS services for accounts where the only AePS transaction within the last 12 months is reported as fraudulent.

The NPCI’s advisory to banks includes several key measures:

Aadhaar-based biometric authentication of business correspondents (BCs) and agents before enabling interoperable AePS cash withdrawal transactions.
Daily monitoring to identify and halt any potential misuse.
Discontinuation of AePS services for accounts that have not witnessed any AePS debits in the last 12 months.
Prompt disabling of AePS services for accounts where the only AePS transaction within the last 12 months is reported as fraudulent.
Obtaining explicit customer consent for enabling or disabling AePS as a debit mode.

These measures aim to prevent unauthorized cash withdrawals and protect the interests of bank customers. As AePS continues to serve customers who are not digitally active, the NPCI emphasizes the importance of maintaining the security and integrity of the Aadhaar-enabled payment system. This is indeed a proactive step towards ensuring safer financial transactions.

Customer Consent and Communication

The NPCI has also emphasized the need for explicit customer consent for enabling or disabling AePS as a debit mode. Banks are advised to facilitate easy access for customers to enable or disable this service through multiple communication channels.

Enrolling in AePS

Enrolling in the Aadhaar-enabled Payment System (AePS) is a straightforward process. Here are the steps you need to follow:

Link Aadhaar with Bank Account: To use AePS, you need to register your Aadhaar number with your bank and link it to your account.
Visit a Micro-ATM or Banking Correspondent: Go to a micro-ATM or banking correspondent in your area.
Enter Aadhaar Number: Enter your 12-digit Aadhaar number in the PoS Machine.
Provide KYC Information: Provide KYC (Know Your Customer) information to open a new account.
Select Transaction Type: Select the type of transaction you are willing to make.
Biometric Verification: Provide verification through biometrics.
Collect Transaction Receipt: After the transaction is complete, collect your transaction receipt.

Please note that your Aadhaar number should be linked with the bank account. Also, remember that the transaction cost is usually nil to the customer, but the merchant or BC may get charged or paid based on the bank’s discretion

Enrolling in AePS is a straightforward process that involves linking your Aadhaar number with your bank account and providing biometric verification at a micro-ATM or banking correspondent. Once enrolled, users can check their transaction history and are subject to certain transaction limits set by the NPCI.

How to Check Transaction History on AePS?

Checking your transaction history on the Aadhaar-enabled Payment System (AePS) can be done through the following steps:

Visit a Banking Correspondent or Micro-ATM: Go to a banking correspondent or micro-ATM in your area.
Provide Aadhaar Number and Bank Name: Enter your 12-digit Aadhaar number and the name of your bank.
Choose Transaction Type: Select the option to view your transaction history or obtain a mini-statement.
Biometric Verification: Provide verification through biometrics.
Collect Transaction Receipt: After the transaction is complete, collect your transaction receipt.

Please note that the availability of transaction history or mini-statements may vary based on the bank’s discretion and the capabilities of the micro-ATM or banking correspondent.

Conclusion

The NPCI’s proactive measures aim to curb the rising incidents of fraud on the AePS network and protect the interests of bank customers. As the adoption of AePS services continues, maintaining the security and integrity of the Aadhaar-enabled payment system is paramount to its continued success and wider adoption. This article underscores the importance of these measures in ensuring safer financial transactions in the digital age.

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Frequently Asked Questions (FAQs) about the Aadhaar-enabled Payment System (AePS)

What is Aadhaar Enabled Payment System (AePS)?
- AePS is a payment service that allows a bank customer to use Aadhaar as their identity to access their Aadhaar enabled bank account and perform basic banking transactions like balance enquiry, cash withdrawal, remittances through a Business Correspondent.
What are the services available under AePS?
- The services offered via AePS include cash withdrawal, cash deposit, payment transactions, mini statements, balance enquiry, authentication, Aadhaar to Aadhaar fund transfers, and BHIM Aadhaar Pay.
What is important for AEPS to work?
- For AEPS to work, the user’s bank account must be linked to their Aadhaar number. The user must also provide their Aadhaar number and biometric details at a PoS or Micro ATM to complete transactions.
Is there any limit on AEPS Cash Withdrawal and Fund Transfer transactions?
- Yes, there are limits on AEPS transactions. The NPCI has set a maximum transaction amount of ₹10,000 for a single AePS financial transaction. Some banks have implemented a daily limit of ₹50,000 on the total number of transactions.
Is there any age criteria to avail AEPS services?
- There is no specific age criteria mentioned for availing AEPS services. However, the user must have a valid Aadhaar number and a bank account linked to it.
Where do a customer register a complaint for the failed transaction?
- Customers can register a complaint for a failed transaction with their respective bank or financial institution