As per the Statement on Development and Regulatory Policies, “The Statement on Developmental and Regulatory Policies dated August 06, 2020 had announced a scheme to conduct pilot tests of innovative technology that enables retail digital payments even in situations where internet connectivity is low / not available (offline mode). Three pilots were successfully conducted under the Scheme in different parts of the country during the period from September 2020 to June 2021 involving small-value transactions covering a volume of 2.41 lakh for value Rs 1.16 crore. The learnings indicate that there is a scope to introduce such solutions, especially in remote areas. Given the experience gained from the pilots and the encouraging feedback, it is proposed to introduce a framework for carrying out retail digital payments in offline mode across the country. Detailed guidelines will be issued in due course. ”
The pilot scheme for small value retail transactions in offline mode was done using cards and mobile wallets.
As per the pilot scheme guidelines, the upper limit of a payment transaction was Rs 200 and total limit for offline transactions was Rs 2,000 at any point. Further, such payment transactions was done without Addiitonal Factor of Authentication.
Over the years, the Reserve Bank has prioritised security measures for digital payments such as the requirement of Additional Factor of Authentication (AFA) and online alerts for every transaction to increase customer confidence and safety. This was done to enable the adoption of digital payments.
Absence of, or erratic, internet connectivity, especially in remote areas, is a major impediment for adoption of digital payments. Availability of options to make offline payments, using cards, wallets or mobile devices could boost the adoption of digital payments.
To encourage technological innovations that enable offline digital transactions, Reserve Bank had proposed to permit a pilot scheme to be conducted for a limited period. Under the pilot scheme, authorised Payment System Operators (PSOs) – banks and non-banks – were to be allowed to provide offline payment solutions using cards, wallets or mobile devices for remote or proximity payments. The scheme was subject to conditions. Other entities having innovative solutions shall tie-up with the authorised PSOs.
It was proposed that the pilot scheme would be undertaken till March 31, 2021 only. The Reserve Bank has now decided to go ahead with a scheme in this area.
