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RBI announces framework for digital payments in offline mode

The Reserve Bank of India announced a framework for small value digital payments in offline mode on Monday. The framework is based on pilots conducted between September 2020 and June 2021 by authorised entities including banks and non-banks. 

The proof-of-concept included chip-based card transactions as piloted by Visa or Near Field Communication (NFC) or sound wave based technology as tried by ToneTag, CityCash, PaySe, and others.

The move will benefit the adoption of digital transactions in rural areas or where internet connectivity is erratic or unpredictable. 

The framework allows authorised Payment System Operators (PSOs) and Payment System Participants (PSPs) to accept offline payment made using cards, wallets, and mobile devices among others. The upper limit per transaction has been fixed at Rs 200 while the overall limit for offline transactions through a particular channel has been set at Rs 2,000 at any point in time.

The transactions will be proximity-based, ie, face-to-face transactions and will not require additional factor authentication, said the framework. While the issuer will have to send transaction alerts to the users, there is no compulsion to send alerts for each transaction.

“We welcome RBI’s progressive move providing impetus to digital payment via offline mode. This move would further embolden digital payment growth and adaptation in the country,” said Vishwas Patel, Chairman, Payment Council of India (PCI) and Executive Director of Infibeam Avenues Ltd in a statement.

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