NPCI Asks Banks To Activate Offline Transaction On RuPay Cards By October 31

SUMMARY

RuPay cards will have to comply with the framework by the end of the next month and the cards that are non-compliant will have to be re-issued

The move will enable the One Nation, One Card ideology to get a boost, shortly after the RBI issued the offline payments framework in January 2022

Under the framework, no internet or telecom connectivity or OTPs would be required to facilitate transactions of less than INR 200

UPI-parent National Payments Corporation of India (NPCI) has set a deadline of October 31 for banks to activate offline transactions on their RuPay cards. The move will enable the One Nation, One Card ideology to get a boost, shortly after the RBI issued the offline payments framework in January 2022.

According to a Business Standard report, RuPay cards will have to comply with the framework by the end of the next month and those cards that are non-compliant will have to be re-issued and get NPCI’s qSPARC specifications.

With more than half of UPI transactions’ value being less than INR 200, the Reserve Bank of India has maintained that digital payments consume significant system capacity and bank resources. To give a fillip to the ecosystem, RBI introduced a wallet-style feature for low-value transactions.

Under an RBI paper titled ‘Framework for Facilitating Small Value Digital Payments in Offline Mode’, the apex bank stated that it successfully piloted offline mode for small transactions (within INR 200), where no internet or telecom connectivity or OTPs would be required. The framework would still use the existing payment channels or instruments such as cards, wallets and mobile devices.

Further, the banks, payment gateways and payment apps will not be liable to send alerts on a real-time basis but can send an aggregated statement. Through an ‘on-device’ wallet in the UPI app (similar to what Paytm/PhonePe offer), consumers can ‘recharge/replenish’ their offline wallets up to INR 2,000 and make payments even without internet.

While the wallet limit is INR 2,000, the upper limit for such offline payments will be INR 200.

Besides these, the RBI has also introduced UPI123Pay. Despite the similarity between the two owing to their ‘offline’ mechanism, UPI123Pay and the small value offline payments framework are different from each other.

The former was built for feature phone users who could use UPI without an internet connection via Interactive Voice Response (IVR) or a missed call (compare it to the older *111# number dialling mechanism to check mobile balances).

While UPI123Pay has already been in use, the success rate of the same has not been disclosed by NPCI. Thus, it remains to be seen how small value offline payments via Rupay cards will pan out.