Daily News Analysis

Offline Digital Payment

6th January, 2022 Economy

Figure 5: No Copyright Infringement Intended

 

Context

  • Reserve Bank of India (RBI) has allowed offline mode of payments using any channel or instrument like cards, wallets or mobile devices. 
  • To push digital transactions in rural and semi-urban areas, the Reserve Bank of India (RBI) issued a framework allowing offline payments up to Rs 200 per transaction, subject to an overall limit of Rs 2,000.

 

About offline digital payments:

  • Meaning: An offline digital payment means a transaction that does not require internet or telecom
  • Modes: 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.
  • Delayed alerts: These transactions will not require an additional factor of authentication (AFA). Since the transactions are offline, alerts will be received by the customer after a time lag.
  • Limit for offline payment transactions: 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.Balance replenishment can only occur in an online mode.

 

Significance of this move:

  • Push to digital transactions: 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.
  • Consent of the customer: It can be enabled only after obtaining the specific consent of the customer.
  • Grievance Redressal: The customers will continue to enjoy protection under the provisions of circulars limiting customer liability and will have recourse to the Reserve Bank Integrated Ombudsman Scheme for grievance redress.