The Reserve Bank of India (RBI) on Monday issued a framework to enable small value digital payments in offline mode using any channel or instrument such as cards, wallets and mobile devices.

An offline digital payment means a transaction which does not require internet or telecom connectivity.

Under this new framework, which is applicable with immediate effect, offline payments can be made in face-to-face (proximity) mode only.

Payment instruments will be enabled for offline transactions by Authorised Payment System Operators and Participants (Banks and Non-banks) based on explicit consent of the customer. Offline transactions using cards will be allowed without a requirement to switch on the contactless transaction channel.

Delayed alerts

Such transactions will not require an Additional Factor of Authentication (AFA). Since the transactions are offline, alerts (SMS and / or e-mail) will be received by the customer after a time lag.

The upper limit of an offline payment transaction will be ₹200. The total limit for offline transactions on a payment instrument will be ₹2,000 at any point in time.

Replenishment of used limit will be allowed only in online mode with AFA.

Customers will enjoy protection under the provisions of circulars limiting customer liability issued by RBI (as amended from time to time). Further, they also have recourse to the Reserve Bank – Integrated Ombudsman Scheme for grievance redress.

The acquirer will incur all liabilities arising out of technical or transaction security issues at merchant’s end.

Push to digital transactions

RBI said offline transactions are expected to give a push to digital transactions in areas with poor or weak internet or telecom connectivity, particularly in semi-urban and rural areas.

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