RBI releases framework for offline digital payments

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RBI releases framework for offline digital payments

  • 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.

Small value offline transactions

  • 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.

Limit for offline payment transactions

  • 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.

Grievance redressal

  • 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.