All you need to know about RBI’s move to allow offline digital payments


by 5paisa Research Team Last Updated: Jan 11, 2022, 03:16 PM IST

Indians will now be able to make digital payments even without an internet connection. 

The Reserve Bank of India (RBI) on Monday cleared a framework for allowing offline transactions, in a bid to boost adoption of digital payments in rural areas and even semi-urban or far-flung regions that may lack viable internet and telecom services.

This will also help those people who cannot afford smartphones, to transact using feature phones that may not have data services. 

What will be the transaction limits for such payments?

Each payment will have a transaction limit of Rs 200, subject to an overall cap of Rs 2,000. 

According to the Framework for Facilitating Small Value Digital Payments in Offline Mode, “Transactions are subject to a limit of Rs 200 per transaction and an overall limit of Rs 2,000 for all transactions until the balance in the account is replenished. Balance replenishment can only occur in an online mode.”

How will these payments work?

Under the offline mode, payments can be carried out face-to-face (proximity mode) using any channel or instrument like cards, wallets, and mobile devices. These transactions will not require an additional factor of authentication, the RBI said.

The central bank also said that since the transactions are offline, alerts (by way of text messages and/or e-mail) will be received by the customer after a time lag.

But why is the RBI doing this?

The RBI is doing this in a bid to push the adoption of digital payments in the country. 

Digital payment services like BHIM, Google Pay, PhonePe, WhatsApp Pay and Paytm work on the Unified Payments Interface (UPI), and have become popular with transactions reaching record levels. But these apps require internet connectivity. 

Does the customer have any safeguards while paying via the offline mechanism?

Yes. The customer continues to enjoy protection under the provisions of circulars limiting customer liability and will have recourse to the Reserve Bank Integrated Ombudsman Scheme for grievance redress.

Moreover, offline payments can be made using any channel or instrument like cards, wallets, and mobile devices.

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