Screen Merchants at Onboarding Using UPI Risk Signals

Payment aggregators and banks are required to perform due diligence on merchants before activating them for payment acceptance. FraudTrace AI lets you screen a merchant’s settlement UPI VPA against a continuously updated database of mule accounts, fraud networks, and illegal platforms — giving your onboarding team an evidence-backed risk signal before you approve a single transaction. This guide explains how to embed that check into your merchant onboarding workflow.

When to screen

Screening at a single point is better than nothing, but a layered approach gives you the strongest coverage:

Stage	What to screen	Why
KYC / application	Settlement VPA submitted on the application form	Catch fraudulent merchants before any manual review begins
Pre-activation	Settlement VPA again, just before account goes live	Catch VPAs that became flagged between application and activation
Periodic re-screening	All active merchant settlement VPAs	Detect merchants whose VPAs appear in newly discovered fraud networks post-approval

Periodic re-screening is especially important for high-volume or high-value merchants. A VPA that was clean at onboarding can be linked to fraud activity months later.

Screen the merchant’s settlement VPA

Use the single VPA lookup endpoint with the merchant’s settlement UPI VPA:

curl

curl -G https://api.fraudtraceai.com/v1/verify/upi \
  --data-urlencode "upi=merchant_settlement@okhdfc" \
  -H "Authorization: Bearer YOUR_API_KEY"

A flagged response will look like this:

{
  "upi": "merchant_settlement@okhdfc",
  "status": "FLAGGED",
  "confidence": 0.91,
  "risk_category": "gambling",
  "cluster_id": "MC-3892",
  "cluster_size": 4,
  "first_seen": "2025-09-03T11:00:00Z",
  "last_seen": "2026-03-28T09:15:00Z",
  "sources": [
    {
      "url": "https://spinfast-india.com",
      "category": "gambling",
      "captured_at": "2026-02-10T08:00:00Z",
      "screenshot_available": true
    }
  ],
  "evidence_count": 2
}

Onboarding decision table

Map the API response directly to an onboarding action:

Result	Confidence	Action
`CLEARED`	—	Proceed with onboarding
`FLAGGED`	≥ 0.85	Reject the application and document the FraudTrace response
`FLAGGED`	0.60–0.84	Initiate enhanced due diligence before proceeding
`FLAGGED`	< 0.60	Approve with additional monitoring and scheduled re-screening

A CLEARED status means the VPA is not present in the FraudTrace database at the time of screening. It is not a clearance certificate. Always use FraudTrace alongside your existing KYC, business verification, and document checks — never as a standalone signal.

Domain screening (coming soon)

For merchants who operate websites, FraudTrace will soon offer domain-level screening via the CyberTrace endpoint:

GET /v1/cyber/check

This endpoint will flag merchant domains associated with phishing pages, illegal gambling operations, and fake lending sites. Contact your account manager to join the early access programme.

Logging for audit trail

Indian payment regulations require acquirers and banks to maintain verifiable records of the due diligence performed on merchants. Log the full FraudTrace API response — not just the decision — as part of your onboarding record. At minimum, store the following fields alongside the merchant’s KYC record:

{
  "screened_at": "<ISO 8601 timestamp of API call>",
  "upi": "<merchant settlement VPA>",
  "status": "<FLAGGED | CLEARED>",
  "confidence": "<score or null>",
  "cluster_id": "<cluster ID or null>",
  "risk_category": "<category or null>",
  "evidence_count": "<integer>",
  "fraudtrace_request_id": "<request ID from response headers>"
}

FraudTrace returns a unique request ID in the X-Request-Id response header. Store this with every screening record so you can retrieve the original API response during a regulatory audit or dispute.

Re-screening active merchants

For periodic re-screening of your active merchant portfolio, use the batch endpoint to process large lists efficiently without making hundreds of individual API calls. See Batch UPI Verification for implementation details.

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Core Concepts

Guides

Security & Compliance

Screen Merchants at Onboarding Using UPI Risk Signals

When to screen

Screen the merchant’s settlement VPA

Onboarding decision table

Domain screening (coming soon)

Logging for audit trail

Re-screening active merchants

​When to screen

​Screen the merchant’s settlement VPA

​Onboarding decision table

​Domain screening (coming soon)

​Logging for audit trail

​Re-screening active merchants

When to screen

Screen the merchant’s settlement VPA

Onboarding decision table

Domain screening (coming soon)

Logging for audit trail

Re-screening active merchants