The Reserve Bank of India (RBI) has issued a framework allowing offline payments up to Rs 200 per transaction. An offline digital payment, here, means a transaction that does not require internet or telecom connectivity.

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The new framework is applicable with immediate effect.

Here are key things to know about RBI's offline payment initiative:

How can these payments be carried out?

Under the offline mode, payments can be carried out face-to-face (proximity mode) using any channel or instrument like cards, wallets, and mobile devices.

These transactions will not require an additional factor of authentication (AFA).

What are the transaction limits for this?

Transactions are subject to a limit of Rs 200 per transaction and an overall limit of Rs 2,000 for all transactions until the balance in the account is replenished.

After the limit is over, one will have to resort to online mode to increase and that will be possible with additional factor authentication (AFA).

Will customers receive alert for the same?

Yes.

However, as the transactions are offline, alerts (by way of SMS and/or e-mail) will be received by the customer after a time lag, RBI said.

What is the new initiative aimed at?

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, according to the central bank.

In October last year, the central bank had indicated that it would come up with a framework for carrying out small-value digital payments in the offline mode across the country, after the pilot tests undertaken by various entities during September 2020 and July 2021 gave encouraging feedback.

Will all customers be eligible for this?

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.