UPI payments without internet? RBI to introduce conversational, offline payments via UPI soon

The Reserve Bank of India (RBI) has introduced conversational payments and offline functionality in UPI payments. The RBI Governor Shaktikanta Das has proposed facilitating offline transactions using Near Field Communication (NFC) technology.

The RBI, in its Statement on Developmental and Regulatory Policies, issued on August 2023, states, "To increase the speed of small value transactions on UPI, an on-device wallet called "UPI-Lite" was launched in September 2022 to optimise processing resources for banks, thereby reducing transaction failures. The product has gained traction and currently processes more than ten million monthly transactions. To promote the use of UPI-Lite, it is proposed to facilitate offline transactions using Near Field Communication (NFC) technology. This feature will not only enable retail digital payments in situations where internet/telecom connectivity is weak or unavailable, it will also ensure speed, with minimal transaction declines."

Prashant A Bhonsle, Founder & CEO, Kuhoo, online student loan platform, said, "The proposed integration of Near Field Communication (NFC) technology to facilitate offline transactions is a forward-thinking move that can enhance financial inclusion and accessibility. Enabling retail digital payments in situations where internet or telecom connectivity is weak or unavailable will undoubtedly open new avenues for commerce and empower individuals in previously underserved areas. The promise of minimal transaction declines and swift transaction speeds along with an increase in overall transaction limit from Rs.200 to Rs.500, will make the usage of UPI Lite more relevant."

Additionally, Amit Nigam, COO & Executive Director of BANKIT, said, "This is a major step forward for digital payments in India, and it will make it much easier for people to pay for goods and services even when they don't have internet connectivity. We believe offline payments in UPI will be a boon for people in rural and remote areas, where internet connectivity is often unreliable. It will also be helpful for people who travel frequently and may not always have access to a reliable internet connection."

Hence, the popularity of generative AI has emphasised the attraction for easy-to-use instructions that make technology more accessible and easily adopted.

Adhil Shetty, CEO of BankBazaar.com, said, "UPI is India's most preferred payment method, and it is great that the RBI is looking at ways to simplify ways in which people interact with the payment system. A further simplified AI-based interface can reduce barriers to adoption, especially among senior citizens and people with disabilities, and give them seamless access to their finances. The enhanced limits on small UPI payments of up to 500 and the NFC options will create a new set of use cases for UPI and help consumers in areas with low internet connectivity."

Conversational payments in UPI: UPI, with its ease of usage, safety and security, and real-time feature, has transformed the digital payment ecosystem in India. Addition of many new features over time have enabled UPI to facilitate diverse payment needs of the economy. As Artificial Intelligence (AI) is becoming increasingly integrated into the digital economy, conversational instructions hold immense potential in enhancing ease of use, and consequently reach, of the UPI system. It is, therefore, proposed to launch an innovative payment mode viz., "Conversational Payments" on UPI, that will enable users to engage in a conversation with an AI-powered system to initiate and complete transactions in a safe and secure environment. This channel will be made available in both smartphones and feature phones-based UPI channels, thereby helping in the deepening of digital penetration in the country. The facility will, initially, be available in Hindi and English and will subsequently be made available in more Indian languages. Instructions to NPCI will be issued shortly, as per Statement on Developmental and Regulatory Policies.

Akash Sinha, CEO & Co-Founder of Cashfree Payments, said, “The Reserve Bank of India (RBI) has once again emphasised the significance of promoting digital payments in its latest Monetary Policy announcement. By proposing innovative concepts such as Conversational Payments and Offline capability on the Unified Payments Interface (UPI), the Central Bank is wholeheartedly advocating the integration of cutting-edge technologies like Artificial Intelligence (AI) and Near Field Communication (NFC) through 'UPI-Lite' on-device wallet, within the realm of payments.