RBI allows small-value digital payments in offline mode

admin January 6, 2022
Updated 2022/01/06 at 1:59 PM

The Reserve Bank of India (RBI) has released a framework for allowing small-value digital payments in offline mode, a step that would encourage people to use digital payments in semi-urban and rural regions.

The framework incorporates feedback received from the pilot experiments on offline transactions conducted in different parts of the country between September 2020 and June 2021.

Offline digital payment does not require the use of the Internet or a telephone connection.

According to the RBI, “Such payments may be made face-to-face (proximity mode) via any channel or instrument, such as cards, wallets, and mobile devices,”

“An Additional Factor of Authentication (AFA) would not be required for such transactions. After a period of time, “Because the transactions are offline, the consumer will get alerts (through SMS and/or e-mail),” it added.

There is a limit of ₹200 per transaction and an overall limit of ₹2,000 for all transactions until the balance in the account is replenished. Balance replenishment can only occur in an online mode.

“Only after getting the express agreement of the conditions of Reserve Bank circulars limiting consumer responsibility may offline mode of payment be authorised” (as amended from time to time). Customers may also file a complaint with the Reserve Bank’s Integrated Ombudsman Scheme, “according to the regulator.

Stating that offline transactions would give a push to digital transactions in areas with poor or weak Internet or telecom connectivity, particularly in semi-urban and rural areas, the RBI said the framework became applicable with immediate effect.

The RBI approved a pilot scheme in August 2020 to promote technology developments that allow small-value digital transactions to be made offline.

It was stated therein that the decision on formalising such a system would be based on the experience gained.

Following positive feedback from the pilots, a framework was published in the Statement on Developmental and Regulatory Policies on October 8, 2008.

Payment instruments should be enabled for offline transactions only with the customer’s explicit consent, “it added.

It goes on to say that the acquirer is responsible for any liabilities deriving from technical or transaction security concerns at the merchant’s end.


Source: The Hindu

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