Facilitating Small Value Digital Payments in Offline Mode
The Reserve Bank of India had, vide Circular No. RBI/2021-22/146 dated January 03, 2022, introduced a system that enable small value digital transactions in offline mode. RBI has been working on allowing offline payments for a few years and had include in it its vision documents for payment and settlement systems.
What is Offline Payment?
An offline payment means a transaction which does not require internet or telecom connectivity to take effect.
Requirements for Offline Payment
Authorised Payment System Operators (PSOs) and Payment System Participants (PSPs) – Acquirers and Issuers (banks and non-banks) – desirous to provide / enable payment solutions that facilitate small value digital payments in offline mode shall comply with the following requirements:
- Offline payments may be made using any channel or instrument like cards, wallets, mobile devices, etc.
- Offline payments shall be made in proximity (face to face) mode only.
- Offline payment transactions may be offered without Additional Factor of Authentication (AFA).
- Payment instruments shall be enabled for offline transactions based on explicit consent of the customer. Such transactions using cards shall be allowed without a requirement to switch on the contactless transaction channel, in relaxation of terms of DPSS circular no. DPSS.CO.PD no.1343/02.14.003/2019-20 dated January 15, 2020 on Enhancing Security of Card Transactions.
- The upper limit of an offline payment transaction shall be ₹200. The total limit for offline transactions on a payment instrument shall be ₹2,000 at any point in time. Replenishment of used limit shall be allowed only in online mode with AFA.
- The issuer shall send transaction alerts to users as soon as transaction details are received. There is no compulsion to send alert for each transaction; however, details of each transaction shall be adequately conveyed.
Pulkit Singh, Audit Associate, SW India
