RBI releases framework for small value offline digital payment

The Reserve Bank of India (RBI) announced a framework on Monday that allows offline payments up to Rs 200 per transaction, subject to a total limit of Rs 2,000, in order to encourage digital transactions in rural and semi-urban regions.

A transaction that does not require internet or telecom connectivity is referred to as an offline digital payment.

Payments can be made face-to-face (proximity mode) via any channel or instrument, such as cards, wallets, and mobile devices, in the offline mode.

The Reserve Bank of India stated that these transactions will not require an additional factor of authentication (AFA), and that because the transactions occur offline, the consumer will receive warnings (through SMS and/or e-mail) after a time lag.

“Until the account balance is replenished, transactions are restricted to a maximum of Rs 200 per transaction and a total restriction of Rs 2,000 for all transactions. Only in online mode is it possible to replenish your balance” The Framework for Facilitating Small Value Digital Payments in Offline Mode stated as such.

The framework integrates feedback from pilot experiments on offline transactions undertaken in various sections of the country from September 2020 to June 2021, according to the statement.

“In places with limited or no internet or telecom connectivity, such as semi-urban and rural areas, offline transactions are expected to boost digital transactions. The new framework goes into effect right now “ The Reserve Bank of India stated.

It stated that the offline mode of payment might be enabled after receiving the customer’s explicit approval.

Customers will continue to be protected under the provisions of circulars restricting customer liability, and will be able to seek redress through the Reserve Bank Integrated Ombudsman Scheme.

Offline payments can be done using any channel or instrument, including credit cards, digital wallets, and mobile devices.

“Offline payments shall be made solely in proximity (face-to-face) mode,” it stated, adding that such transactions might be offered without the need for an AFA.

Also, such card transactions should be permitted without the need to activate the contactless transaction channel.

Furthermore, all liabilities deriving from technical or transaction security vulnerabilities at the merchant’s end should be borne by the acquirer. Offline payments will be protected by the RBI’s limited consumer liability circulars, according to the central bank.

All licensed payment system operators (PSOs) and payment system participants (PSPs), as well as acquirers and issuers (banks and non-banks), have been urged by the RBI to guarantee that the guidelines are followed.

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