AePS Frauds On The Rise: Here Is How To Protect Yourself

Technology has made payments much easier, but at the same time, it has also meant that frauds have gone up. Recently, the Minister of State for Finance, Pankaj Chaudhary shared in the Rajya Sabha that such frauds have gone up substantially and he especially mentioned AadhaarEnabled Payment System (AePS) which have seen a significant rise in numbers. 

Common AePS scams involve obtaining Aadhaar details and fingerprints to authorise unauthorised transactions. 

The Reserve Bank of India (RBI) is taking significant steps towards enhancing the security and reliability of AePS, reflecting its commitment to a customer-centric approach. In response to rising fraud incidents linked to identity theft and compromised credentials, RBI has released the draft directions on Due Diligence of AePS Touchpoint Operators. This initiative aims to bolster customer trust and ensure the safety of transactions, particularly in rural areas where digital literacy may be lower.

“By implementing ongoing due diligence and monitoring, along with tailored transaction limits based on risk profiles, the RBI is proactively addressing potential fraud risks. Additionally, the RBI has emphasised the importance of robust cybersecurity measures and effective management of third-party risks, urging banks to combat digital fraud and raise customer awareness,” says Ankit Ratan, Co-founder & CEO, Signzy, a fintech company. 

“The RBI's proactive approach in setting clear guidelines, such as requiring acquiring banks to perform thorough due diligence and update KYC for inactive AePS Touchpoint Operators, will ensure that only verified and active operators are part of the AePS network, thereby minimising the risk of fraudulent activities,” says Dilip Modi, Founder & CEO of Spice Money, a rural fintech company. 

Additionally, establishing transaction limits based on the risk profile of each operator is a vital measure. “By tailoring these limits to the specific risk level, the system can effectively monitor and control transaction activities, reducing the likelihood of suspicious or fraudulent transactions,” he adds. 

These initiatives reflect the RBI's commitment to creating a secure, reliable, and inclusive financial ecosystem, ensuring that all customers can engage with digital payment systems confidently. 

However, the onus is on each of us to be careful so that we do not fall a victim of such frauds. Here is what you should do. 

Secure Your Aadhaar: Lock your Aadhaar biometrics through the UIDAI website or mAadhaar app to prevent unauthorised use.  

Be Cautious with Biometric Data: Avoid sharing your fingerprints or iris scans with anyone, especially at unofficial locations.

Limit Transaction Amounts: Set daily withdrawal limits for your bank account.

Verify the Agent: Ensure the AEPS agent is authorised and operating from a legitimate location.

Monitor Your Account: Regularly check your bank account balance for any unauthorised transactions.  

Create Strong Passwords: Use complex passwords for your bank accounts and online services.

Enable Two-Factor Authentication: Add an extra layer of security by enabling two-factor authentication.

Anagh Pal

BW Reporters