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Explained: RuPay Cards Can Be Used for Offline Payments and Shopping

Image of RuPay used for representation.

Image of RuPay used for representation.

For the offline transaction, RuPay cards will use NFC technology that will establish contact with the PoS device through radio-frequency. This allows the card to function and transact without internet connectivity.

The National Payments Corporation of India (NPCI) has announced that RuPay cards now support RuPay Contactless feature for retail payments in the country. The new feature essentially enables RuPay debit and credit card users to make offline payments at point-of-sale (PoS) devices using Near-Field-Communication technology. With the latest development, the NPCI would also hope to boost digital transaction in the country amid the COVID-19 pandemic. NPCI had previously stated that as of January 2020, a total of 600 million RuPay cards have been issued by 1,100 banks.

The RuPay Contactless feature for RuPay cardholders would be extremely useful in areas with low internet connectivity. Since the card uses NFC, the technology enables it to work with PoS devices through radio-frequency to establish contact while in proximity (typically 20cm). This feature is also deemed safe and convenient. As its name suggests, users would be able to make contactless payment which is particularly useful and advisable during COVID-19 pandemic. Speaking over the development, NPCI in a statement had said, "We are delighted to unveil the new RuPay Contactless (offline) feature which is aimed at transforming the transaction experience for customers by deploying enhanced NFC technology and innovative card payment solutions. We are confident that with the advent of the stellar RuPay contactless (offline) feature, the acceptance infrastructure for RuPay will increase exponentially and will result in the rapid onboarding on both merchants and consumers in various geographies across the nation." The latest feature coupled the RBI's latest amendment to increase the limit of contactless or NFC-based transactions from Rs 2,000 to Rs 5,000 (from January 1, 2021) could lead to wider adoption of RuPay cards in India.

In addition to RuPay contactless (offline) feature, NPCI has also deployed a reloadable wallet facility that would allow customers to store money and use that for day-to-day transit payments. It essentially acts as a prepaid e-wallet that can be used to purchase services and goods, thereby further promoting offline transactions in areas that frequently faces connectivity issues. This feature is currently enabled for the National Common Mobility Card (NCMC), and will be made available for regular retail payments on a pilot basis, NPCI said.

Besides, the NPCI has also extended the offline wallet facility to retail stores on a pilot basis, after the Reserve Bank of India's approval for a pilot on retail offline transactions. The umbrella body for payments and settlement claims that this facility would be a boost for merchants as it reduces physical payments' through tap-and-go mode.