Housing Development Finance Corporation (HDFC) Bank on Monday announced that it has launched a pilot known as ‘OfflinePay’ to test offline digital payments for customers and merchants enabling payments transactions even when there is no mobile network.
As per the HDFC, it has launched the first-of-its-kind digital payment solution, in partnership with Sweden based Crunchfish Digital Cash AB, a subsidiary of Crunchfish AB, for merchants and customers under the RBI’s Regulatory Sandbox Program.
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The Bank said in a statement that the digital payment solution would boost adoption of digital payments in smaller towns and rural areas with poor network connectivity. It can enable cashless payments during large public events, fairs and exhibitions despite network congestion; underground metro stations, parking lots, and retail stores with network blind spots; and even in airplanes, sea-ferries, and trains with no network.
“Digital payment typically requires one party (either the customer or the merchant) to be online. This limits the usage of such payments to areas with good data connectivity.”
“HDFC Bank’s ‘OfflinePay’ brings in the unique capability where both customer and merchant can be fully offline and yet do the transaction. Merchants can receive an instant payment confirmation even in an offline mode. As soon as either the merchant or the customer goes online, the transaction gets settled,” said the Bank.
The service would be rolled out for 4 months in 16+ cities and towns across India, as part of a limited pilot, HDFC Bank said.
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It would enable merchants and users of even other banks to experience ‘OfflinePay’ via an invitation link. During the pilot, the offline transaction amount would be limited to up to Rs. 200 per transaction.
Parag Rao, Country Head for Payments Business, Consumer Finance, Digital Banking, and Marketing at HDFC Bank, said, “HDFC Bank is pleased to work under regulator’s guidance and partner with Crunchfish Digital Cash to launch ‘OfflinePay’, an industry-first digital solution. This innovation will accelerate financial inclusion in remote areas by enabling adoption of digital payments as both merchants and customers can do transactions without any network. HDFC Bank is committed to bring more digital innovations and payment solutions to its customers and merchants.”
HDFC Bank has been working with the regulator to pilot offline digital payments under the Payments cohort of RBI’s Regulatory Sandbox program.
In September 2022, RBI approved HDFC Bank’s application, in partnership with Crunchfish, to access the Regulatory Sandbox.
To showcase off-us transactions with other bank’s customers and merchants, HDFC Bank has partnered with IDFC First Bank. For building customer and merchant apps for pilot, HDFC Bank had enrolled M2P Fintech Pvt Ltd, the bank said the statement.
The pilot, if successful, will provide the basis for RBI’s guidance and regulatory support in providing offline digital payments based on ‘Crunchfish Digital Cash’ platform to the payment ecosystem of India, the statement added.
