Offline Digital Payments: Exploring the Impact and Future of Digital Transactions Without Internet
Offline digital payments refer to transactions that do not require internet or telecommunication connectivity. These payments can be made face-to-face, using various mediums like cards, wallets, and mobile devices. This article delves into the significance of offline digital payments, the Reserve Bank of India (RBI)'s pilot scheme, and the associated security measures adopted to ensure customer safety.
Pilot Scheme and Offline Digital Payments
The Reserve Bank of India (RBI) has taken steps to encourage the adoption of offline digital payments. Under the pilot scheme, payment system operators (PSOs), banks, and non-banks are allowed to offer digital payments offline, without needing internet connectivity. This initiative is particularly crucial given the challenges of internet stability, especially in remote areas.
According to the RBI, the absence or erratic internet connectivity is a major impediment to the adoption of digital payments. By providing offline payment options, cardholders, e-wallet users, and mobile device users can continue with their financial transactions without interruption. The upper limit for a payment transaction was initially capped at Rs 200 for the pilot scheme, which ran until March 31, 2021.
Security Measures and Customer Trust
The RBI has prioritized security in digital payments, implementing measures like Additional Factor of Authentication (EBA) and online alerts for every transaction. These security measures have significantly increased customer confidence and safety, leading to increased adoption of digital payments. The commitment to security is further highlighted by the Reserve Bank Governor Shaktikanta Das-led Monetary Policy Committee (MPC), which regularly reviews and implements measures to enhance payment security.
RBI's Most Recent Policy Decision
On the last bi-monthly MPC review meeting held in August, the RBI maintained key interest rates and retained the GDP growth target at 9.5%. Additionally, the MPC elected to maintain the status quo on the repo and reverse repo rates to support economic growth and manage inflation. This decision signifies the RBI's ongoing focus on strengthening the economy through strategic financial policies.
IMPS Upper Limit Enhancement
Another significant development in the realm of digital payments is the enhancement of the upper limit for Immediate Payment Service (IMPS). Bank customers can now transfer up to Rs 5 lakh via IMPS, a substantial increase from the earlier limit of Rs 2 lakh. This expansion aims to provide more flexibility and convenience to customers, making digital transactions more accessible and user-friendly.
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