Financial services giant Visa and YES Bank are looking to “adopt” five villages in the coastal region of Karnataka to test drive Reserve Bank of India’s (RBI) much-anticipated feature phone-based digital payments system, powered by Kerala-based startup Yuva Pay.
The three-month-long project will enable account holders to make digital payments through their feature phones and without an internet connection. The project is expected to last from December to mid-March.
“RBI is clear on its emphasis on financial inclusion, especially at the gram panchayat level. With limited internet connectivity, all digital plans fall flat, and for this, we are collaborating with banks and fintech to develop such a solution,” said Arvind Ronta, head of products, Visa India and South Asia.
Under the programme, Yuva Pay prepaid card will be given to 2 Lakh households in the village to carry out online payments with a daily transaction limit of INR 200, leveraging the interactive voice response system (IVRS) technology that enables OTP and a telephone pin-based authentication to implement these transactions. Kerala-based Yuva Pay was one of the startups that had been showcased by Inc42 in its BIGShift series last year.
The digital transactions do not require a 3G connectivity, but only a one-time internet connection to finish KYC and load the money onto the prepaid cards, the Economic Times reported. It can be used both virtually and physically to make payments, by registering through mobile number and linking to any bank account. Digital wallet venture Yuva Pay are currently onboarding merchants to accept these payments.
“The results of the pilot will then be shared with the regulator (RBI), which will study the results and determine the efficacy of expanding such a project at scale,” Visa’s Ronta added.
Separately, Visa is also working on pilots to make contactless debit card payments without the internet. Konta emphasised that these pilots can help understand the pain points of consumer usage.