due to lack of internet connectivity or low speed internet especially in rural areas the reserve bank of india rbi has encouraged companies to develop an offline payment mode for using cards wallets and mobile phones for conducting banking transactions the rbi in its statement on development and regulatory policies issued on august 6 said there has been considerable growth in digital payments using mobile phones cards wallets etc lack of internet connectivity or low speed of internet especially in remote areas is a major impediment in adoption of digital payments 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 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 builtin features for safeguarding interest of users liability protection etcthis move is aimed at addressing the needs of the large section of the population that lives in remote areas and towns where internet connectivity is poor or even nonexistent the rbi also insisted entities to safeguard interest of customers while coming up with the offline payment solutionadhil shetty ceo bankbazaarcom said going forward we can expect to see card and walletbased solutions similar to upi and mobile payment transactions using ussd code that are possible even without internet or smartphonesrbi has issued a notification about pilot scheme for offline retail payments using cards wallets mobile devicesover the years the reserve bank has prioritised security measures for digital payments such as the requirement of additional factor of authentication and online alerts for every transaction these measures have significantly increased customer confidence and safety leading to increased adoption of digital paymentsabsence of or erratic internet connectivity especially in remote areas is a major impediment for adoption of digital payments availability of options to make offline payments using cards wallets or mobile devices could boost the adoption of digital paymentsto encourage technological innovations that enable offline digital transactions reserve bank shall permit a pilot scheme to be conducted for a limited period under the pilot scheme authorised payment system operators psos banks and nonbanks will be able to provide offline payment solutions using cards wallets or mobile devices for remote or proximity payments the scheme would be subject to the conditions detailed in the annex other entities having innovative solutions shall tieup with the authorised psosthe pilot scheme shall be undertaken till march 31 2021 only the reserve bank shall decide on formalising such a system based on the experience gained under the pilotthis directive is issued under section 10 2 read with section 18 of payment and settlement systems act 2007 act 51 of 2007