What are Offline Payments

Reserve Bank of India allows small value offline payments, to be carried out only in proximity or face to face mode.

What exactly does this mean?

WHAT ARE OFFLINE PAYMENTS?

If you are travelling in a remote area with no connectivity, how will you make a cashless payment? 

What if someone does not own a smartphone?

We make online payments in real-time mode. The account is debited instantaneously after we authorise the payment with an OTP.

In this case, the payment and actual debit to your account are asynchronous. What it means is that the actual debit to account may happen at a later stage after the transaction is done.

It is like writing a cheque. You sign it and hand it over to the seller. But your account is debited only when the cheque is presented in the bank for payment.

WHAT DOES PROXIMITY OR FACE-TO-FACE MODE MEAN?

It means you should have the debit or credit card or phone physically where the transaction is being done.

It cannot be used only by entering card details on the system.

WILL IT NEED AUTHORISATION BY OTP?

No. Additional factor authentication will not be needed.

WILL IT GENERATE A TRANSACTION ALERT?

A transaction alert will be generated after a time lag, as and when the debit happens and connectivity is restored.

It is mandatory to register for transaction alerts and email alerts to mitigate the possibility of frauds.

CAN I TRANSFER ANY AMOUNT BY THIS METHOD?

No. Offline payments are restricted to a maximum of Rs.200/- per transaction. The total volume allowed is Rs.2000/-, till the wallet is loaded again, or arrangement refreshed.

This will cater to small payments like paying an auto-rickshaw driver, buying something at a roadside eatery or canteen or some other small payment.

WHAT DO I NEED TO DO TO START USING OFFLINE PAYMENTS?

You need to give your consent first. Banks cannot enable offline payments without customer consent.

Ensure that you are in offline mode. If there is no connectivity, the system flashes a message saying You are offline. If the network is weak, and you wish to do the transaction in offline mode, change your settings to offline.

Carry out the transaction as usual. 

You need not authorise the transaction with an OTP or a second layer authorisation.

A void or refund is not possible since transaction history is not available.

The transaction is uploaded as and when the system comes online, and transaction alerts will be received.

WHY DOES INDIA NEED OFFLINE PAYMENTS?

We need this functionality to boost digital payments in remote areas. It overcomes the barriers of poor network connectivity and non-availability of smartphones.

Find the RBI circular here

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