The Reserve Bank of India (RBI) on Thursday raised the upper limit for offline payment transactions from existing Rs 200 to Rs 500 to promote the use of UPI-lite wallets in areas where internet connectivity is weak or not available.

However, the overall limit for offline transactions on the payment instrument is Rs 2,000.

In a circular titled “Enhancement of transaction limit for small value digital payments in offline mode”, the central bank said, “The upper limit for offline payment transactions has been raised to Rs 500.”

It added, “The replenishment of the utilized limit shall be done only in online mode with AFA.” AFA stands for Additional Factor of Authentication.

It also said that offline payments should be made only face-to-face. Furthermore, these transactions can be offered without an AFA.

The RBI also launched a device wallet called UPI Lite in September last year to increase the speed of small value transactions on UPI, optimize processing resources for banks and reduce transaction failures.

The product currently processes over 10 million transactions per month.

Earlier this month, the RBI proposed to promote UPI-Lite to facilitate offline transactions using Near Field Communication (NFC) technology. Transactions through NFC do not require PIN verification.

It had said that this facility will not only enable retail digital payments but also ensure speed, as well as minimum drop in transactions in situations where internet or telecom connectivity is weak or not available.

first published: 24 August 2023 | 3:31 pm First

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