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BFSI Chronicle, 11 Edition September2022
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inclusion to promote inclusive development. Thirdly, it provides avenues for risk sharing
and mitigation.
Firstly, through its ability to lower transaction
costs and reduce information asymmetries, UPI Payments Without Internet and Smart-
finance, first of all, facilitates the efficient phone:
allocation of resources to growth-enhancing “India has a large mobile phone consumer base of
sectors and projects. about 118 Crore Mobile Users (TRAI, October 2021) of
which about 74 Crores have smart phones indicating
Secondly, it helps in the mobilization of savings that there is a significant number of feature phone
for investment; and users in the country. Feature phone users have limited
access to innovative payment products”.
We have all become dependent on online transactions
to some extent or the other. Very often it happens
that people don’t carry any cash relying on the likes
of Paytm, Phone Pe, and Google Pay, only to find
out that the shop they want to buy stuff from either
does not accept online transactions or at times there
is no internet connectivity to be able to make any
transactions. Now, while the former problem can only
be fixed if the shopkeeper accepts online payments, the
latter issue can be addressed.
RBI has had three successful pilots of this new providers, to launch UPI-based payment products for
small-value transaction program in different parts feature phone users leveraging on the Reserve Bank’s
of the country during the period of September 2020 regulatory Sandbox on Retail Payments”.
to June 2021. These tests amounted to a total of 2.41
lakh transactions at a value of ` 1.16 crores. Since the This process will make the small-value transactions
transactions are offline, alerts will be received that do simpler than ever “through a mechanism of
not require internet, just a working phone number. ‘on-device’ wallet in UPI applications.”
Offline payments are being seen as RBI’s latest step
towards boosting digital payments in the country. Reserve Bank of India (RBI) has allowed offline
mode of small-value payments using any channel
RBI launched a UPI-based payment system for feature or instrument like cards, Wallets, or mobile devices
phones on November 8, 2021. with immediate effect. This means that users can do
any transaction of up to ` 200 without an internet
The objective is: connection using any mobile phone or wallet.
According to the new rule, offline payments are
“In order to further deepen digital payments and limited to `200.
make them more inclusive, ease transactions for
consumers, facilitate greater participation of retail Under the new framework, such payments can
customers in various segments of the financial be carried out face-to-face using any channel or
markets, and enhance the capacity of service instrument like cards, wallets, or mobile devices.
The Institute Of Cost Accountants Of India
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