Recently the Reserve Bank of India (RBI) has released the framework for offline digital payments.
This framework has been issued under the Payment and Settlement Systems Act, 2007.
Offline payment refers to a transaction that does not require internet or telecom connectivity to be effective.
- It includes any medium or instrument such as a card, wallet or mobile device subject to certain conditions for Authorized Payment System Operators (PSOs) and Payment System Participants (PSPs).
- The objective of this framework is to promote digital transactions in rural and semi-urban areas. Under this, offline payments up to Rs 200 per transaction have been allowed with an aggregate limit of Rs 2,000.
- Under this new framework, small value payments can be done face-to-face mode using cards, wallets, mobile devices etc.
- Additional Factor of Authentication (AFA) will not be required for such transactions.
- RBI’s Integrated Ombudsman Scheme will be applicable for grievance redressal.
Benefits of offline mode payment –
- It will enable retail digital payments in remote areas with low speed or no internet connectivity.
- It will promote digital payment mechanisms and encourage technological innovations in payment systems.
Source – The Hindu