SUMMARY
The ‘advanced offline payment system’ will go live over the course of next few months and will enable users to make payments via CBDCs on feature phones sans internet
The product, which is currently in design phase, will leverage Airtel Payments Bank’s financial solution and IDEMIA's CBDC stack to build the app
The new offering will aim to fuel the adoption of CBDCs in the country, promote financial inclusion and address issues associated with facilitating digital transactions in areas with limited connectivity
Airtel Payments Bank has partnered with French biometric solutions provider IDEMIA and Nokia parent HMD Global to launch an offline system for facilitating digital rupee payments on feature phones.
Digital rupee is simply a tokenised digital version of the Indian fiat currency and is issued by the Reserve Bank of India (RBI) as a central bank digital currency (CBDC).
In a statement, IDEMIA said the trio will work together to introduce an ‘advanced offline payment system’ over the course of the next few months. The new system will enable users to make payments via CBDCs without being connected to the internet or not having a smartphone.
“This partnership will work towards further strengthening financial inclusion and digital payments, to make it possible to pay in digital currency even without having a smartphone or being connected to the internet, either temporarily or because of coverage limitations,” the statement said.
The product is currently in design phase and, as per the companies, is the first ‘industry attempt’ to facilitate the use of digital rupee on feature phones through an app interface.
The new offering will leverage Airtel Payments Bank’s financial solution and IDEMIA’s CBDC stack to build the app, and will be available on Nokia feature phones.
It will aim to fuel the adoption of CBDCs in the country, promote financial inclusion and address issues associated with facilitating digital transactions in areas with limited connectivity. The app will also enable the players to tap into the growing adoption of digital currencies in the country and acquire a first mover advantage in the arena.
“… We are confident that once we move from the design phase and launch the solution commercially with all required approvals, it will play a pivotal role in advancing the accessibility of financial services and contribute to India’s transition towards a digitally inclusive economy,” said Prasad Routray, head of corporate business and alliances at Airtel Payments Bank.
Amit Kakatikar, senior vice president of payments solutions at IDEMIA, added that the alliance will provide ‘valuable insights and contributions’ to the evolution of offline retail CBDC systems.
The new system will also enable the trio to roll out the CBDC payments to a wide-range of population, or almost 40 Cr Indian feature phone users.
The development comes at a time when CBDCs are witnessing rapid adoption in the country. On Wednesday, RBI Governor Shaktikanta Das said that CBDC retail pilot has so far onboarded 1.46 Mn users and 0.31 million merchants at the end of August. A separate news report noted that last month saw 10.83 Cr overall CBDC transactions totalling INR 24,000 Cr.
It is pertinent to note that retail CBDCs are still in pilot mode and were launched by the central bank in December 2022.
Earlier this week, the State Bank of India (SBI) also integrated UPI with its digital rupee app to streamline user experience and enhance adoption of the new technology.
The latest announcement from Airtel Payments Bank also comes as RBI tinkers with a host of novel technologies to spur the adoption of digital payments beyond metros and Tier-I cities. Earlier today, the NPCI launched four new UPI products – Credit Line on UPI, Near Field Communication (NFC)-based offline payments offerings UPI LITE X and Tap & Pay and conversational payments products Hello! UPI and BillPay Connect.
