The Reserve Bank of India has introduced a new framework that is expected to further expand the reach of digital payments, even in places with low connectivity and no network. The central bank has placed the ‘Framework for facilitating small value digital payments in offline mode’ on its official website. The new framework is applicable with immediate effect. Also Read - Did you know you can send money using just an Aadhaar number? Check details
The framework incorporates the feedback received from the pilot experiments on offline transactions conducted in different parts of the country during the period from September 2020 to June 2021. Also Read - RBI sets up FinTech Department to promote innovation, create policies in fintech sector
An offline digital payment means a transaction that does not require internet or 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. Also Read - RBI reportedly wants a complete ban on cryptocurrencies: No more Bitcoin billionaires in India?
Such transactions would not require an Additional Factor of Authentication (AFA). Since the transactions are offline, alerts (by way of SMS and / or e-mail) will be received by the customer after a time lag. According to RBI, transactions are subject to a limit of Rs 200 per transaction and an overall limit of Rs 2000 for all transactions until the balance in the account is replenished. The balance can only be replenished in the online mode.
Safety around the new payment method
RBI has emphasized that the offline mode of payment can be enabled only after obtaining the specific consent of the customer. Customers also get the protection under the provisions of circulars limiting customer liability issued by Reserve Bank (as amended from time to time). Customers also have recourse to the Reserve Bank – Integrated Ombudsman Scheme for grievance redress.
Offline transactions are expected to give a push to digital transactions in areas with poor or weak internet or telecom connectivity, particularly in semi-urban and rural areas.