No Mobile Internet? Here’s How UPI May Soon Allow Offline Payments Up to Rs 2,000

UPI payments might soon be a seamless affair, no longer causing you stress about network problems or depleting your mobile data. The country is reportedly building an offline “tap-and-pay” feature on its most popular digital payments service to help customers transact with their smartphone and point-of-sale (PoS) device from a vendor even when not hooked up to the internet. The feature could allow digital payments in places where connectivity is often patchy, such as on flights, underground metro stations, remote villages, tunnels or crowded places where mobile networks get congested.

According to the Business Standard report, the new feature is being worked on by the National Payments Corporation of India (NPCI) but there has been no official word on the feature or when it will be rolled out.

How will UPI payments work offline?

The feature we propose will use Near Field Communication (NFC) technology, which is the same technology that powers contactless debit and credit card payments.

Here’s what the process is supposed to look like:

When connected to the internet, users will first have to load money into their UPI Lite wallet. Once the wallet is sufficiently funded, they simply tap their NFC-enabled smartphone on a compatible merchant PoS terminal to pay.

Unlike a normal UPI transaction, an active internet connection would not be required for the customer’s phone and the merchant’s payment terminal at the point of purchase.

The payment authorisation is stored securely on the merchant’s terminal and sent to the banking network later, when internet connectivity is restored. Customers would also not have to enter their UPI PIN for each transaction, as the payment would be adjusted against the pre-loaded UPI Lite balance.

The Transaction May Be Limited To Rs 2000

The offline tap-and-pay facility is expected to support transactions of up to Rs 2,000, the report said.

However, NPCI has not officially confirmed the transaction limit or provided any operational guidelines. The ultimate limit and usage terms could be announced nearer the launch date.

Where Will This Feature Be Helpful?

The major advantage of the proposed system is that it overcomes one of the few remaining challenges faced by UPI, i.e., dependency on internet connectivity.

The feature could be especially useful in places like:

• Flights where mobile networks are unavailable
• Underground Metro stations
• Rural and remote regions with weak connectivity
• Large buildings or event venues where networks are overloaded
• Tunnels and other low-signal locations

In such environments today, a large number of UPI payments fail, as both the customer and the merchant need to be online to make the transaction go through.

What Makes It Different From Existing Offline UPI?

Offline UPI is not new. In 2023, NPCI had launched UPI Lite X, which allows money transfers between two smartphones equipped with NFC capability. These transactions are routed through the NFC medium. This facility does not require the Internet to carry out any payment.

But there’s a big catch: both the sender and receiver will need to have UPI Lite X enabled on their phones.

The proposed feature extends far more, i.e., extending offline payments to merchant PoS terminals. Customers will be able to make payments at retail stores, transport services and other businesses that have NPCI-certified offline payment terminals, instead of paying another smartphone user.

It would also significantly raise the transaction limit. UPI Lite X is currently available for offline transactions up to Rs 500. The new merchant payment feature is expected to support a payment of Rs 2,000.

What Needs To Happen Before Launch?

NPCI is also planning to start issuing certifications to eligible PoS terminals from the top terminal vendors during the current financial year. Banks, fintech companies, and third-party UPI apps will need to onboard this feature in their platforms before merchants can begin offering offline UPI payments to consumers. NPCI has not yet confirmed this development or stated when it will be released.

Will This Feature Be A Game-Changer?

The most used digital payments app, UPI, accounts for a majority of all digital transactions made in the country today. Between 2021 and 2026 (June), UPI transactions recorded have exceeded 22.72 billion in number and were valued at ₹28.92 lakh crore during that period – translating to 757 million transactions per day between the same times.

The internet connection grows rapidly. But in some cases it is one of the main reasons for payment failures.

The successful rollout of the offline tap and pay feature could help make UPI payments more reliable in low-connectivity areas and add the convenience of contactless card payments to millions of users. It would also help the merchants continue to receive digital payments, even in the case of temporary unavailability of network services, making India’s digital payments ecosystem more resilient.

For now, the feature will be available to the users once the NPCI makes an official announcement.

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