Mumbai: The Reserve Bank of India (RBI) on Monday set the upper limit for individual offline payment transactions at ₹200, saying such payments could only be done face-to-face.
These are part of the its “framework for facilitating small value digital payments in offline mode” and follows pilot testing by some entities from September 2020 to July 2021. On August 6, RBI had permitted a pilot scheme to encourage technological innovations that enable small value digital transactions done offline.
It is to be mentioned that an offline payment is a transaction which does not require internet or telecom connectivity. The regulator said that authorised Payment System Operators (PSOs) and Payment System Participants (PSPs) looking to facilitate small value offline digital payments have to comply with the new guidelines.
“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 (additional factor authentication),” it said.
RBI said that payment instruments shall be enabled for offline transactions only after explicit consent of the customer. That apart, these transactions using cards will be allowed without a requirement to turn on the contactless transaction channel, relaxing an existing regulation announced in January 2020.
“The customers shall have recourse to the Reserve Bank – Integrated Ombudsman Scheme, as applicable, for grievance redressal. Reserve Bank retains the right to stop or modify the operations of any such payment solution that enables small value digital payments in offline mode,” the regulator said.
While India has witnessed a boom in sales of cheap smartphones and even cheaper data connections, internet connectivity is yet to reach many parts of the country. The latest available data from the World Bank showed that in 2019, 41% of India’s population had access to an internet connection. Therefore, RBI’s move to push offline payments is inclusive as many customers without smartphones would be able to reap the benefits of digitization.
RBI has been working on allowing offline payments for a few years and had included it in its vision document 2019-21 for payment and settlement systems. Consumer behaviour, RBI said in the document released in May 2019, has been driving growth of digital payments as consumers are embracing mobile technology.