What changed
RBI moved from a pilot scheme (August 2020) to a permanent framework for offline digital payments, based on successful testing from September 2020 to July 2021. The framework sets transaction limits of ₹500 per payment and ₹2,000 total per instrument, with higher limits for UPI Lite (₹1,000 per transaction, ₹5,000 total). Offline payments are proximity-only, require explicit customer consent, and do not need AFA.
What it means for you
Banks and payment operators can now offer offline digital payment solutions using cards, wallets, or mobile devices, expanding reach in areas with poor connectivity. Issuers must send transaction alerts and ensure replenishment of limits only online with AFA. Acquirers bear liability for technical or security issues at merchant end, and all transactions fall under RBI's limited customer liability rules.
What you must do
- Ensure compliance with the framework for offline payments, including transaction limits of ₹500 per payment and ₹2,000 total per instrument.
- Obtain explicit customer consent before enabling offline payment capability on any instrument.
- Set up systems to send transaction alerts to users and convey details of each transaction adequately.
- For UPI Lite, implement enhanced limits of ₹1,000 per transaction and ₹5,000 total, with online-only replenishment using AFA.
- Prepare to handle customer grievances under the RBI Integrated Ombudsman Scheme and accept liability for merchant-end issues.
Who it affects
Authorised Payment System Operators (PSOs), Payment System Participants (PSPs) including banks and non-banks, Issuers and acquirers of cards, wallets, and mobile payment instruments, Merchants accepting offline digital payments, Customers using offline payment solutions
What is the maximum transaction limit for offline digital payments under this framework?
The upper limit per offline payment transaction is ₹500, with a total limit of ₹2,000 on a payment instrument at any point in time. For UPI Lite, the limits are enhanced to ₹1,000 per transaction and ₹5,000 total.
Is Additional Factor of Authentication (AFA) required for offline payments?
No, offline payment transactions may be offered without AFA. However, replenishment of used limits must be done only in online mode with AFA.
Who bears liability for technical or security issues at the merchant's end?
The acquirer shall incur all liabilities arising out of technical or transaction security issues at the merchant's end.