The National Payments Corporation of India is developing an offline UPI feature that uses NFC tap-to-pay to enable transactions at merchant point-of-sale terminals when both the customer’s mobile device and the merchant terminal lack internet connectivity.
Technical Model
- Technology: Near‑Field Communication (NFC) — short‑range contactless wireless used for tap‑to‑pay between phone and terminal.
- Transaction Flow: User taps an NFC‑enabled phone on a compatible POS; verification occurs offline using pre‑stored credentials or wallet balance.
- Authentication: NPCI proposes no UPI PIN entry for each offline tap; secure offline authorisation mechanisms are required by protocol.
- Limit: Proposed per‑transaction cap is ₹2,000 for NFC offline UPI payments.
Operational Requirements
- On‑device Wallet: Customers must load funds into an on‑device UPI Lite wallet while online to use for offline payments.
- POS Certification: NPCI plans certification of merchant point‑of‑sale devices (manufacturers) during 2026 for compatibility.
- Offline Eligibility: Both the payer device and merchant terminal must be offline for the offline flow to apply.
Related Offline Systems
- UPI Lite: On‑device wallet for small-value offline transactions.
- UPI Lite X: Launched September 2023 for NFC‑based phone‑to‑phone offline payments.
- USSD 99#: Service for basic UPI functions on feature phones; selected functions have a ₹5,000 limit.
IASPOINT Booster Facts
- NPCI: National Payments Corporation of India operates and governs the UPI ecosystem and certifies participants.
- UPI: Real‑time retail payment system enabling bank‑to‑bank transfers via mobile applications.