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RBI approves small, offline e-payments

It aims to promote usage in rural areas

January 03, 2022 10:51 pm | Updated 10:51 pm IST - Mumbai

FILE PHOTO: The logo of Reserve Bank of India (RBI) is seen inside its headquarters in Mumbai, India, February 7, 2019. REUTERS/Francis Mascarenhas/File Photo

FILE PHOTO: The logo of Reserve Bank of India (RBI) is seen inside its headquarters in Mumbai, India, February 7, 2019. REUTERS/Francis Mascarenhas/File Photo

The Reserve Bank of India (RBI) has come out with the framework for facilitating small-value digital payments in offline mode, a move that would promote digital payments in semi-urban and rural areas.

The framework incorporates feedback received from the pilot experiments on offline transactions conducted in different parts of the country between September 2020 and June 2021.

An offline digital payment 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 and mobile devices,” the RBI said.

“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,” it added.

There is a limit of ₹200 per transaction and an overall limit of ₹2,000 for all transactions until the balance in the account is replenished. Balance replenishment can only occur in an online mode.

“Offline mode of payment can be enabled only after obtaining specific consent of 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,” the regulator said.

Stating that offline transactions would give a push to digital transactions in areas with poor or weak Internet or telecom connectivity, particularly in semi-urban and rural areas, the RBI said the framework became applicable with immediate effect.

The RBI had in August 2020 permitted a pilot scheme to encourage technological innovations that enable small value digital transactions in offline mode.

It was stated therein that the decision on formalising such a system would be based on the experience gained.

With encouraging feedback from the pilots, it was announced in the Statement on Developmental and Regulatory policies on October 08, that a framework would be introduced.

“Payment instruments shall be enabled for offline transactions based on explicit consent of the customer,” it added.

The acquirer shall incur all liabilities arising out of technical or transaction security issues at the merchant’s end, it further said.

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