- India is developing offline UPI payments allowing transactions without internet on devices or PoS terminals
- NPCI plans to certify PoS devices from top manufacturers for offline UPI transactions in 2024
- Users can tap and pay via NFC with a transaction limit of Rs 2,000, similar to card tap payments
India is developing a new offline payment capability for the Unified Payments Interface (UPI) that would allow transactions without an internet connection on either the customer's device or a merchant's point-of-sale (PoS) terminal.
According to Business Standard, three people familiar with the matter reported that the National Payments Corporation of India (NPCI), which operates UPI, is expected to certify PoS devices from the country's leading terminal manufacturers this year to enable such offline transactions.
Users would be able to tap and pay using near-field communication (NFC) technology, with transactions capped at Rs 2,000, mirroring the card-tap experience already familiar to consumers.
The outlet reported that the development builds on NPCI's 2023 rollout of UPI Lite X, which enabled offline transfers between two NFC-enabled smartphones.
The new capability would extend this offline functionality to PoS machines for the first time, allowing merchants to accept such payments even without connectivity, opening up use cases such as payments aboard flights and on underground metro networks.
A person at a fintech firm told the publication that PoS companies would need certification from NPCI before they could build applications enabling UPI acceptance in offline settings.
Another person cited in the report said that a tap using the app would allow payment even if the terminal itself was offline, with the transaction authorisation "captured" and sent for verification once network connectivity resumed.
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The feature is also expected to eliminate the need for users to enter their UPI PINs at the point of transaction, the report said, with customers instead loading funds onto an on-device UPI Lite wallet to transact in low-connectivity environments.
The move would help close one of the last remaining gaps between UPI and card networks, which have long supported offline transactions through chip-based authorisation.
Some card issuers have reportedly restricted usage aboard airlines due to operational issues, a gap that the new UPI feature could address given its initially modest transaction ceiling.
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