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Visa to enable deeper financial inclusion with offline payments in India

Visa, the global leader in digital payments, is driving a Proof of Concept (POC) for offline digital payments in India. A first for the domestic payments ecosystem, the initiative is led by Visa in partnership with YES BANK and Axis Bank. The offline payments technology will allow users to make transactions using chip-based Visa debit, credit and prepaid cards even in places with low or no internet connectivity. Extending Visa’s commitment to RBI guidelines on offline payments, the solution is a significant step towards greater financial inclusion across rural, urban and remote areas. The POC has been executed in partnership with Innoviti in catchment areas in Bengaluru.

This thrust to offline payments underlines the government’s vision of digital and financial inclusion in Digital India. In a country where cards are the most popular instrument of digital payments and customers and merchants are migrating from cash to digital, offline payments can allow deeper percolation in the country. Visa cardholders may soon get to request their banks for a fresh card that enables this solution.

The chip will hold a stored value of a daily spend limit of INR 2,000 and have a per transaction limit of INR 200, as currently mandated by the RBI. This is akin to having a wallet with a preloaded amount. In the event of insufficient balance, the transaction will be declined, making this proposition suitable for cardholders as well as merchants. Merchants also stand to gain revenue from reduced friction and risk of payment failures. Visa’s solution is the first of its kind and equipped to enter the Indian market.

“The pandemic’s unprecedented impact has spurred significant movement in the digital payments ecosystem. With the RBI’s cognizance of low and no connectivity being major impediments to financial inclusion, offline payments have the potential to catalyse digital payments usage even where internet connectivity is a challenge and failed transactions are a top concern. With this solution, Visa aims to work with our clients to see if this can scale with mass adoption,” said T.R. Ramachandran, Group Country Manager, India and South Asia, Visa.

Prashant Kumar, Managing Director and Chief Executive Officer, YES BANK, said, “To drive adoption of digital transactions in remote reaches of the country and ensure financial inclusion, the bank feels it is indispensable to invest in the right technology tools that will help service a significant proportion of the digital payments market in Bharat. We are glad for this opportunity to forge a valuable partnership that allows us to leverage emerging technologies with the potential to enrich customer journeys and make them more convenient across the country. With this approach, YES BANK has taken another step towards fulfilling its vision of satisfying customer needs in a convenient, harmonious way, especially in rural areas.”

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