RBI Allows Offline Payments; Transaction Limit Up to Rs.2000

Encouraging digital transactions in rural and semi-urban areas with stunted internet connectivity, the Reserve Bank of India has permitted offline digital payments. The transaction is legal to a limit of Rs. 200 per transaction and 2000 until the balance in the account is reloaded. 

How Will Offline Payments Work? 

This is a simple digital payment but without the requirement of the internet or use of telecom connectivity, and this will also not require any Additional Factor of Authentication (AFA). “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,” said RBI. 

Legality And Framework

The RBI announced this structure after getting feedback from the pilot experiment done in the country in 2020-21. Also, the RBI has asked payment system participants and payment system operators to look after people and guide them well with instructions. The whole directive of this framework is equipped under section 10(2) (Exemption of Income Received from a HUF) with section 18 of the payment and settlement system act, 2007. 

Mechanism Of Offline Payments

The RBI has informed that the issuer shall send transaction alerts to users as soon as the transaction details are received. There is no compulsion to send an alert for each transaction; however, details of each transaction shall be adequately conveyed. The acquirer shall incur all liabilities arising out of technical or transaction security issues at the merchant’s end.

 RBI also stated that the Offline mode of payment can only be enabled after the specific assent of the customer. Customers shall enjoy protection under the provisions of circulars limiting customer liability issued by Reserve Bank. Customers also have recourse to the grievance redress.

The availability of this option will boost digital transaction methods and be a significant step towards digital India.