Understand the Offline Pay the Newest Mode of Payment

Understand the Offline Pay the Newest Mode of Payment

18 May, 2023

The Reserve Bank of India (RBI) introduced a regulatory sandbox in 2019 to carry out the test phase of OfflinePay. It had chosen HDFC Bank for this test phase.

OfflinePay is a wallet functionality on your device which can carry out retail transactions even when it, or the receiver’s device, is not connected to the internet. The user can view, maintain and recharge the OfflinePay feature on their device in a digital wallet-like manner. Transactions are carried out in the offline mode using a merchant QR code. The transaction gets verified through the user’s transaction PIN, and a signed QR code is generated. By scanning this code, the merchant can register the transaction in their system. The respective accounts are updated when the parties are back online.

Features of OfflinePay

Here are some of the key features of OfflinePay,

  • Users can secure access to their OfflinePay app through fingerprint, pattern or Pin lock,

  • Top-up of the wallet can be done through a payment gateway using online payment methods and using Additional Factor Authentication (AFA),

  • This mode of e-payment is aimed at ensuring transactions in places with poor or no internet, in-transit transactions, transactions in blind spots and clogged spaces, etc.

  • A maximum of five transactions can be carried out between both parties offline,

  • M2P system and Crunchfish SDK stores the digital wallet details,

  • The customer’s login status in the OfflinePay payment app remains active for 90 days,

  • In case of wallet closure, the available wallet balance is zeroised and refunded to the registered bank account within seven days. Wallet closure is also required to uninstall the app.

Limitations of OfflinePay

  • The maximum transaction amount allowed is ₹ 200, 

  • There is a cap of ₹ 2000 on the maximum top-up value in the OfflinePay wallet,

  • As a result, the limit of offline transactions at any point in time is ₹ 2000.

Benefits of OfflinePay

Only 1% of the Indian population was using the internet in the year 2000, which increased to 20% in 2018. By 2020, it reached 43%, according to World Bank’s data. As more and more people get access to the internet, the dependency on electronic payment systems is bound to increase. This is evident from the QR code stickers peeking out of almost every street vendor’s window these days. However, while internet users increase, limitations regarding connectivity continue in places. OfflinePay will help people in carrying out small retail e-payments in scenarios like,

  1. In remote places with poor or no internet connectivity. This could be pockets of tier-3, tier-4, tier-5 towns and rural India,

  2. OfflinePay can help in places with high population or building density, like a conference, sports arenas, music concerts, fairs and festivals, underground parking, basements, malls, lifts, etc.

  3. It will also be useful in buying a cup of in-flight tea or in the middle of a river cruise,

  4. OfflinePay can also come in handy in case of scheduled banking system maintenance, connectivity issue or even a disaster scenario.

Ease of use

The OfflinePay application is designed to be an easy-to-use and handy mode of payment. Customers can log in to the user app and have the OfflinePay wallet created within the app. They can recharge the wallet through the payment gateway in online mode only. Once recharged, the OfflinePay wallet is ready to be used.

At the time of the retail transaction, the customer can scan the merchant QR code at the merchant location and select OfflinePay wallet for the e-payment. While in offline mode, the OfflinePay wallet gets debited and the wallet creates a QR code. This QR code is then scanned by the merchant.

As the signed QR code becomes available in both the customer and the merchant devices, the transaction gets posted when either of the two parties comes online. The posting of the transaction is confirmed subsequently. It happens in real-time or in batch mode, as and when the beneficiary core banking system is connected online. With this, the OfflinePay transaction is complete.

Contactless or proximity payments have increased drastically in recent years, rising more than six times between Jan 2019 and Jan 2022. The fact that a scan and pay option will now be available offline should give a further boost to small retail transactions. OfflinePay payment app and its offline functionalities are offered by HDFC Bank as a limited offering and pilot project release. One can hope that it will be well received by customers and merchants once OfflinePay gets added as one of the regular payment methods.

Check here for your closest merchant that offers OfflinePay now!

You can read more about understanding the new mode of payment here!

​​​​​​​*Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances.

Check for your closest merchant that offers this service now.

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