Understand the Offline Pay the Newest Mode of Payment

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 feature that allows users to conduct retail transactions even when their device or the receiver's device is offline. Users can manage and recharge the OfflinePay feature in a convenient digital wallet format. Transactions are processed offline using a merchant QR code, verified through the user's PIN. Once verified, a signed QR code is generated, enabling the merchant to register the transaction in their system. The respective accounts are updated automatically once both parties reconnect to the internet.

Here are some of the key features of OfflinePay:

• Users can secure access to the OfflinePay app using fingerprint, pattern, or PIN lock for added protection.
• Wallet top-ups are easy through a payment gateway using various online payment methods and Additional Factor Authentication (AFA).
• This e-payment method is for transactions in areas with limited or no internet connectivity. It is ideal for in-transit payments and situations in blind spots or congested spaces.
• A maximum of five offline transactions can occur between both parties.
• The M2P system and Crunchfish SDK store the details of the digital wallet securely.
• Users’ login status in the OfflinePay app remains active for 90 days. When closing the wallet, the available balance is zeroed out and refunded to the registered bank account within seven days. Note that wallet closure is also required before uninstalling the app.

• 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.

In the year 2000, only 1% of the Indian population had access to the internet, a figure that grew to 20% by 2018 and reached 43% by 2020, according to World Bank data. As internet access expands, reliance on electronic payment systems is also set to rise, evident from the QR code stickers found on nearly every street vendor's window today. However, connectivity issues persist in many areas. OfflinePay addresses these challenges by facilitating small retail e-payments in various scenarios, including:

• Remote Locations: Ideal for tier-3, tier-4, and tier-5 towns and rural areas with limited or no internet connectivity.
• High-Density Areas: Useful in crowded settings such as conferences, sports arenas, music concerts, fairs, festivals, underground parking facilities, basements, malls, and lifts.
• In-Flight Purchases: Enables transactions for items like a cup of tea during a flight or while enjoying a river cruise.
• Unforeseen Circumstances: Assists users during scheduled banking maintenance, connectivity outages, or disaster situations.

The OfflinePay application is designed for easy and convenient payment transactions. Here’s how it works:

• User-Friendly Interface: Customers can easily log in to the OfflinePay app and create their wallets within the application.
• Wallet Recharge: The wallet can be recharged through a payment gateway, but this must be done online.
• Ready for Use: The OfflinePay wallet is ready for transactions once recharged.
• Retail Transactions:

• At the merchant location, the customer scans the merchant's QR code and selects the OfflinePay wallet.
• While offline, the wallet is debited, and a QR code is generated.

• Merchant Registration: The merchant scans the signed QR code generated by the customer.
• Transaction Posting:

• The signed QR code is stored on the customer’s and merchant’s devices.
• The transaction is posted when either party comes online.

• Confirmation: The transaction posting is confirmed in real-time or batch mode, depending on when the beneficiary's core banking system is online.

Contactless or proximity payments have increased drastically in recent years, rising more than six times between Jan 2019 and Jan 2022. A scan and pay option will now be available offline should further boost 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 is added as a regular payment method.

Check here for your closest merchant that offers OfflinePay now!

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

​​​​​​​Disclaimer: *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.