The Reserve Bank of India (RBI) is all set to introduce a new framework for retail digital payments in offline mode across the country to further the reach and adoption of digital payments in areas with low internet connectivity.

       It had announced its intention of doing pilot tests in this area in its developmental and regulatory statement dated August 06, 2020. Post that, three pilots were successfully conducted under the scheme in different parts of the country from September 2020 to June 2021 involving 241,000 small-value transactions worth Rs 1.16 crore.

       “The learnings indicate that there is scope to introduce such solutions, especially in remote areas. Given the experience gained from the pilots and the encouraging feedback, it is proposed to introduce a framework for carrying out retail digital payments in offline mode across the country,” the RBI said.

       Adoption of retail digital payments took off in a big way after the Coronavirus (Covid-19) pandemic hit. Monthly volumes of UPI, the most popular retail digital payment platform, are touching 3 billion transactions.

       Meanwhile, the RBI has also enhanced the transaction limit under Immediate Payment Service (IMPS) from Rs 2 lakh to Rs 5 lakh. IMPS is a payment platform that offers instant domestic funds transfer facility 24x7 through various channels.

       “This will lead to a further increase in digital payments and will provide an additional facility to customers for making digital payments beyond Rs 2 lakh,” the RBI said.

       With RTGS now operational round the clock, there has been a corresponding increase in settlement cycles of IMPS, thereby reducing credit and settlement risks, the RBI further said.

       Also, among other major decisions, the RBI has said, it will introduce a framework for leveraging geo-tagging technology for capturing exact location information on all existing and new payment acceptance infrastructure such as Point of Sale (PoS) terminals, Quick Response (QR) codes.

       According to the RBI, to ensure a balanced spread of acceptance infrastructure across the length and breadth of the country, it is essential to ascertain location information of existing payment acceptance infrastructure. Hence, the geotagging technology will be useful for targeting areas with deficient infrastructure for focussed policy action.