Due to lack of Internet connectivity or low speed Internet, especially in rural areas, the Reserve Bank of India (RBI) has encouraged companies to develop an offline payment mode for using cards, wallets and mobile phones for conducting banking transactions.
The RBI, in its Statement on Development and Regulatory Policies issued, on August 6, said, "There has been considerable growth in digital payments using mobile phones, cards, wallets, etc. Lack of internet connectivity or low speed of internet, especially in remote areas, is a major impediment in adoption of digital payments. Against this backdrop, providing an option of off-line payments through cards, wallets and mobile devices is expected to further the adoption of digital payments. The Reserve Bank has been encouraging entities to develop offline payment solutions. It is, therefore, proposed to allow a pilot scheme for small value payments in off-line mode with built-in features for safeguarding interest of users, liability protection, etc."
"The instructions in this regard will be issued shortly. Based on experience gained, detailed guidelines for roll-out of the scheme will be announced in due course," RBI said.
This move is aimed at addressing the needs of the large section of the population that lives in remote areas and towns where internet connectivity is poor, or even non-existent. The RBI also insisted entities to safeguard interest of customers while coming up with the offline payment solution.
Adhil Shetty, CEO, BankBazaar.com said, "Going forward, we can expect to see card- and wallet-based solutions similar to UPI and mobile payment transactions using USSD code that are possible even without internet or smartphones."
The RBI has been trying to address the above mentioned issues and also encourage rural consumers to adopt digital payments solutions. The National Payments Corporation of India (NPCI) has been running *99#, a USSD based mobile banking service for feature phones for many years.