New RBI scheme to encourage digital payments even in places without internet - All you need to know

With an aim to encourage customers to go for digital transactions even in those places that lack internet connectivity, the Reserve Bank of India (RBI) on Thursday announced a scheme on a pilot basis for offline retail payments using cards and mobile devices.

"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 offline mode with built-in features for safeguarding the interest of users, liability protection, etc," RBI said in 'Statement on Developmental and Regulatory Policies'. The instructions in this regard will be issued shortly, it added.

The central bank said that based on experience gained, detailed guidelines for the rollout of the scheme will be announced in due course. Observing that lack of internet connectivity or low speed of internet, especially in remote areas, is a major impediment in the adoption of digital payments, the RBI said, "against this backdrop, providing an option of offline payments through cards, wallets and mobile devices is expected to further the adoption of digital payments".

The statement further said that recourse to technology-driven redressal mechanisms that are rule-based, transparent and involve minimum (or no) manual intervention is necessary to deal with disputes and grievances in a timely and effective manner.

"Accordingly, the Reserve Bank shall require PSOs to introduce ODR systems in a phased manner. To begin with, authorised PSOs shall be required to implement ODR systems for failed transactions in their respective payment systems," it said. Based on the experience gained, ODR arrangements will be extended to other types of disputes and grievances, it added.
Meanwhile, the RBI also said Payment System Operators (PSOs) will have to implement Online Dispute Resolution (ODR) as there is a concomitant increase in the number of disputes and grievances as digital transactions rise significantly.