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NPCI issues Guidelines for Merchant Acquisition on BHIM Aadhar Pay

Published on May 10, 2024
Current Context: the National Payments Corporation of India (NPCI) issued guidelines on May 9, 2024, that put the responsibility of verifying merchant details on acquiring banks for BHIM Aadhaar Pay.
NPCI issues Guidelines for Merchant Acquisition on BHIM Aadhar Pay
  • Here's a summary of the key points:
    • Acquiring Banks Responsible for Verification: Acquiring member banks are now responsible for acquiring, managing and monitoring merchants for BHIM Aadhaar Pay. This applies to merchants onboarded directly or through partners.
    • Merchant Onboarding and Due Diligence: Banks are required to have a board-approved policy for merchant acquisition and perform necessary due diligence to mitigate risks.
    • Transaction Monitoring: Banks need to monitor merchant activity, including onboarding criteria, transaction monitoring and control, and training.
    • MCC Assignment: Banks must assign the appropriate Merchant Category Code (MCC) based on the nature of the business, and avoid codes meant for cash withdrawal services.
    • These guidelines aim to strengthen oversight and reduce fraud in BHIM Aadhaar Pay transactions.


Q.1 Who is responsible for verifying merchant details for BHIM Aadhaar Pay according to the new guidelines issued by NPCI?
a. The merchants themselves
b. The Reserve Bank of India
c. The acquiring member banks
d. The National Payments Corporation of India
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