RBI releases framework for offline digital payments

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Last Updated05/01/2022

Reserve Bank of India (RBI) released a framework for small value offline transactions in digital mode.
Offline payments can be made using any channel or means such as cards, wallets or mobile devices, but they will be done in close proximity, or only in face-to-face mode, the framework prescribed.

An offline payment refers to a transaction that does not require internet or telecom connectivity to be effective.
Authorized Payment System Operators (PSOs) and Payment System Participants (PSPs) — banks, as well as non-banks — who wish to offer payments in offline mode, will have to comply with the requirements under the framework.
Offline transactions are expected to boost digital transactions in areas with poor or weak internet or telecom connectivity, especially in semi-urban and rural areas, said RBI.
A pilot trial was conducted to introduce offline payments by some institutions from September 2020 to July 2021.
In October last year, the RBI announced that a framework would be introduced to make small value digital payments in offline mode across the country.

The upper limit for offline payment transactions will be Rs 200.
The total limit for offline transactions on any payment instrument will be Rs 2,000 at any point in time.
The framework states that the replenishment of the used limit will be allowed only in online mode with AFA.
The bank or non-bank issuer will send transaction alerts to the users as soon as the transaction details are received.
While there is no obligation to send alerts for each transaction, the details of each transaction will be adequately communicated.
RBI also stated that the acquirer shall bear all liabilities arising out of technical or transaction security issues on the part of the Merchant.

Customers will have to take recourse to the Integrated Ombudsman Scheme of RBI, as applicable, for grievance redressal.
The framework will come into force with immediate effect.