RBI limits offline payments to `200 per transaction

The Reserve Bank of India (RBI) on Monday issued a framework allowing offline payments up to Rs 200 per transaction, subject to an overall limit of Rs 2,000 and said that such payments could only be done face-to-face. Under the system, a person could pre-load up to Rs 2,000 on his card or phone or a wearable device and spend up to Rs 200 per transaction.

An offline digital payment means a transaction which does not require internet or telecom connectivity and are similar to transactions done through contactless cards. 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.

The new framework, titled ‘Framework for Facilitating Small Value Digital Payments in Offline Mode,’ is applicable with immediate effect, said the RBI.

Naveen Surya, chairman, Fintech Convergence Council, explained, “This is similar to how we pay for a metro train pass or tolls. A person can load up to Rs 2,000 on any of the instruments, be it card, phone or a wearable device and spend up to Rs

200 in a single transaction, for example to buy groceries. This would result in faster payments.”

According to the RBI, 50 per cent transactions through UPI are below Rs

200 and these low-value transactions utilise significant system capacity and resources of the banking system.

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), the RBI said, adding since the transactions are offline, SMS/email alerts will come after a time lag.