On Aug. 6, IND RBI updated on offline retail payment pilot scheme.
The statement on developmental and regulatory policies issued Aug. 6, 2020, proposed RBI would allow a pilot scheme for small value payments in offline mode.
To encourage technological innovations that enable offline digital transactions, the bank shall permit a pilot scheme on this to be conducted for a limited period.
Background
RBI has prioritized security measures for digital payments such as the requirement of additional factor of authentication and online alerts for every transaction.
This has increased customer confidence leading to increased adoption of digital payments, but poor internet connectivity is a major impediment for digital payments.
Availability of options for offline payments, could boost adoption of digital payment.
Pilot Scheme
Under the scheme, authorized payment system operators can provide offline payment solutions using cards, wallets or mobile devices for remote or proximity payments.
The scheme would be subject to the conditions detailed in the annex.
Entities with innovative solutions shall tie-up with authorized payment operators.
Effectiveness
The pilot scheme shall be undertaken till Mar. 31, 2021 only, and IND RBI shall decide on formalizing such a system based on the experience gained under the pilot.
Jan. 2022 Framework Issued
On Jan. 3, 2022, IND RBI issued a framework for offline small value digital payments.
Framework incorporates feedback from pilot experiments Sep. 2020 to Jun. 2021.
Offline digital payment is a transaction not requiring internet/telecom connectivity.
Under this new framework, such payments can be carried out face-to-face (proximity mode) using any channel or instrument like cards, wallets, mobile devices, etc.
Such transactions would not require an additional factor of authentication (AFA).
As transactions are offline, customer will get alerts (SMS and/or e-mail) after time lag.
Limit of 200 rupees per transaction, overall 2,000 rupees limit for all transactions until account balance replenished; balance replenishment can only occur in an online mode.
Offline mode of payment can be enabled after obtaining specific customer consent.
Customers protected under provisions of IND RBI circulars limiting customer liability.
Customers also have recourse to the Reserve Bank integrated ombudsman scheme.
Offline transactions are expected to boost digital transactions in areas with poor or weak internet or telecom connectivity, particularly in semi-urban and rural areas.
The new framework is applicable with immediate effect.
Aug. 24, 2023 Upper Limit Raised
On Aug. 24, 2023, IND RBI raised the upper limit for offline payment transaction to INR 500, as per IND RBI Statement on development and regulatory policies, #181804.
The new transaction limit is effective immediately.
Aug. 31, 2023 IND NPC Value Limit
On Aug. 31, 2023, IND NPC said the per transaction value limit for UPI LITE has now been enhanced to INR500 but no change is made to max. balance in UPI LITE account.
The existing UPI pricing shall be applicable for the transaction amounts between INR 201–INR 500 for both peer-to-peer (P2P) and person-to-merchant (P2M) transactions.
Member banks, third party app providers (TPAPs), merchants, and other payment providers are requested to undertake requisite changes on their application systems.
The changes take effect immediately.
Sep. 2023 Transaction Limit
On Sep. 13, 2023, IND NPC reminded upper limit for offline payment is increased.
RuPay member banks certified for the national common mobility card (NCMC) are required to update their systems to accommodate offline payments up to INR 500.
Document dated Sep. 13, 2023, received from IND NPC Oct. 6, summarized Oct. 9.
Aug. 2024 IND NPC Auto Top-Up
On Aug. 27, 2024, IND NPC introduced auto top-up on UPI LITE, which automatically reloads UPI LITE balance when it falls below a user-set minimum, up to balance limit.
Since the balance resides in the user’s bank and can be refunded instantly upon UPI LITE deletion, pre-debit notification (PDN) is not required for auto top-up transactions.
Issuer banks must support auto top-up functionality, allow debits requested by PSP/app; UPI apps must offer interface for customers to use auto top-up on UPI LITE.
All mandates created must be executed successfully with necessary validation.
PSPs/apps should limit auto-replenishment transactions to 5 per day per account.
Issuer banks must communicate all mandate-related operations to customers.
All members live on UPI LITE must enable the auto top-up feature by Oct. 31, 2024.
Document dated Aug. 27, 2024, received from IND NPC Sep. 11, summarized Sep. 13.
