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Small Value Digital Payments in Offline Mode

An active internet connection is necessary for carrying out any digital payments. However, Reserve Bank of India (RBI) has introduced a framework for carrying out small value digital payments in offline mode.

What is offline payment?

An offline payment means a transaction which does not require internet or telecom connectivity to take effect. 

What is the basis of framework for small value digital payments in offline mode?

Reserve Bank of India (RBI) had, vide circular dated August 06, 2020, permitted a pilot scheme to encourage technological innovations that enable small value digital transactions in offline mode. It was stated therein that the decision on formalising such a system would be based on the experience gained.

With encouraging feedback from the pilots, a framework for carrying out small value digital payments in offline mode across the country has been introduced.

What are the instructions for Payment System Operators (PSOs) and Payment System Participants (PSPs)?

Authorised Payment System Operators (PSOs) and Payment System Participants (PSPs) – Acquirers and Issuers (banks and non-banks), desirous to provide / enable payment solutions that facilitate small value digital payments in offline mode shall comply with the following requirements –

  1. Offline payments may be made using any channel / instrument like cards, wallets, mobile devices, etc.
  2. Offline payments shall be made in proximity (face to face) mode only.
  3. Offline payment transactions may be offered without Additional Factor of Authentication (AFA).
  4. Payment instruments shall be enabled for offline transactions based on explicit consent of the customer. Such transactions using cards shall be allowed without a requirement to switch on the contactless transaction channel, in relaxation of terms of circular on Enhancing Security of Card Transactions.
  5. The upper limit of an offline payment transaction shall be ₹500. The total limit for offline transactions on a payment instrument shall be ₹2,000 at any point in time. 
  6. For UPI Lite, the enhanced limits shall be ₹1,000 per transaction with ₹5,000 being the total limit (updated on December 04, 2024).
  7. Replenishment of used limit shall be allowed only in online mode with AFA.
  8. The issuer shall send transaction alerts to users as soon as transaction details are received. There is no compulsion to send alert for each transaction; however, details of each transaction shall be adequately conveyed.
  9. The acquirer shall incur all liabilities arising out of technical / transaction security issues at merchant’s end.
  10. Offline payments shall be covered under the provisions of RBI’s limited customer liability circulars.
  11. The customers shall have recourse to RBI – Integrated Ombudsman Scheme for grievance redressal.
  12. RBI retains the right to stop or modify the operations of any such payment solution that enables small value digital payments in offline mode.


References

Reserve Bank of India. (2022, January 03). 'Framework for Facilitating Small Value Digital Payments in Offline Mode'. Retrieved from https://www.rbi.org.in/scripts/RTGS_Notification.aspx?Id=12215

Reserve Bank of India. (2023, August 24). 'Enhancing transaction limits for Small Value Digital Payments in Offline Mode'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12531&Mode=0

Reserve Bank of India. (2024, December 04). 'Amendment to Framework for Facilitating Small Value Digital Payments in Offline Mode'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12752&Mode=0


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