Deccan Chronicle

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.

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