Tag: online payment

RBI Framework for Facilitating Small Value Digital Payments in Offline Mode

Key Highlight: RBI has issued this framework allowing offline payments up to Rs 200 per transaction, subject to an overall limit of Rs 2,000.

The Reserve Bank of India (RBI)vide Notification no. RBI/2021-22/146, CO.DPSS.POLC.No.S1264/02-14-003/2021-2022, dated03.01.2022has issued a framework for facilitating small-value digital payments in offline mode using cards, wallets, mobile devices, etc, to push digital transactions in rural and semi-urban areas.

The framework incorporates the feedback received from the pilot experiments on offline transactions conducted in different parts of the country during the period from September 2020 to June 2021.

Applicability: The Framework is applicable with immediate effect.

An offline payment means a transaction which does not require internet or telecom connectivity to take effect. Authorized Payment System Operators (PSOs) and Payment System Participants (PSPs) – Acquirers and Issuers (banks and non-banks) – desirous to provide / enable payment solutions that facilitate small value digital payments in offline mode shall comply with the following requirements:

  1. Offline payments may be made using any channel or instrument like cards, wallets, mobile devices, etc.
  2. Offline payments shall be made in proximity (face to face) mode only.
  3. Offline payment transactions may be offered without Additional Factor of Authentication (AFA).
  4. Payment instruments shall be enabled for offline transactions based on explicit consent of the customer. Such transactions using cards shall be allowed without a requirement to switch on the contactless transaction channel, in relaxation of terms of DPSS circular no. DPSS.CO.PD no.1343/02.14.003/2019-20 dated January 15, 2020 on Enhancing Security of Card Transactions.
  5. The upper limit of an offline payment transaction shall be ₹200. The total limit for offline transactions on a payment instrument shall be ₹2,000 at any point in time. Replenishment of used limit shall be allowed only in online mode with AFA.
  6. The issuer shall send transaction alerts to users as soon as transaction details are received. There is no compulsion to send alert for each transaction; however, details of each transaction shall be adequately conveyed.
  7. The acquirer shall incur all liabilities arising out of technical or transaction security issues at merchant’s end.
  8. Offline payments shall be covered under the provisions of RBI’s limited customer liability circulars (as amended from time to time) – DBR.No.Leg.BC.78/09.07.005/2017-18 dated July 06, 2017; DCBR.BPD.(PCB/RCB).Cir.No.06/12.05.001/2017-18 dated December 14, 2017 and para 17 of Master Direction on Prepaid Payment Instruments dated August 27, 2021.
  9. The customers shall have recourse to the Reserve Bank – Integrated Ombudsman Scheme, as applicable, for grievance redressal.
  10. Reserve Bank retains the right to stop or modify the operations of any such payment solution that enables small value digital payments in offline mode

The framework will enable the Authorised Payment System Operators (PSOs) and Payment System Participants (PSPs), Acquirers and Issuers (banks and non-banks) to conduct small value offline digital payments.The RBI has asked all the authorized payment system operators (PSOs) and payment system participants (PSPs) acquirers and issuers (banks and non-banks) to ensure compliance with the instructions.

Source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12215&Mode=0

Disclaimer:Every effort has been made to avoid errors or omissions in this material. In spite of this, errors may creep in. Any mistake, error or discrepancy noted may be brought to our notice which shall be taken care of in the next edition. In no event the author shall be liable for any direct, indirect, special or incidental damage resulting from or arising out of or in connection with the use of this information.

Financial changes from January 1

GST Rules to be made stringent:

The indirect tax regime which was overhauled in 2017 with the introduction of GST will be made more stringent. As per a Mint report, a number of changes will be brought into effect into CGST beginning the new year. Some of the changes include what will make a taxable supply, eligibility for tax credits as well as norms in relation to filing appeals in respect of some of the cases.

Cash withdrawal to be made expensive:

revised service charges on usage of other Bank ATMs beyond free limit shall be Rs 21+GST (Cash) & Rs 10+GST (Non-Cash).

New ruling as per which you need to complete the EPF nomination by December 31, 2021. 

Updated 24 December 2021 03:39 PM IST

As the world of digital payment is increasing, the incidents of cyber fraud are increasing with its speed. Cyber criminals are engaged in using new technologies and apps to steal people’s data and steal their money.

After the order of RBI, merchants and payment gateways will have to delete all the information of users stored on their servers. This means that you will now have to enter complete card details to make payments on the websites.

Banks have started telling their customers about the new rules. HDFC, one of the leading private banks, is sending a message to its customers that they will either have to enter full card details or opt for tokenisation.

The Reserve Bank of India (RBI) on extended the card-on-file (CoF) tokenisation deadline by six months to June 30, 2022, in view of various representations received from industry bodies.

Card-on-file, or CoF, refers to card information stored by payment gateway and merchants to process future transactions.

The earlier deadline was December 31, 2021.

What is tokenization

At present, 16 digit number of debit or credit card, expiry date of card, CVV and one-time password have to be entered for online payment or transaction. Your card number is stored on the payment app or online shopping platform and you can make payment by just entering CVV and OTP. But now it will not happen.

Tokenization assigns an alternate code to the actual card number, which is called a “token”. With the help of tokenization, the cardholder does not have to share all the details of his debit or credit card. Tokenization is the replacement of the original card number through an alternate code. This code itself is called token.

Tokenization will be unique for each card, token requester and merchant. Once the token is created, the tokenized card details can be used in place of the original card number. It is being said that this system is considered more secure for online payment.