India Prepares Offline UPI Payments for PoS Terminals

The National Payments Corporation of India (NPCI) is working on a new feature for its Unified Payments Interface (UPI) that will allow customers to make payments at merchant terminals without an internet connection. Scheduled for potential certification of PoS terminals in 2026, the system will utilize near-field communication (NFC) technology to process payments of up to Rs 2,000 by tapping a phone on an offline device.

This new functionality aims to facilitate transactions in areas with unreliable or no internet connectivity, such as remote locations or during transit in areas like aircraft cabins or underground metros. To use the feature, customers must pre-load funds to their on-device UPI Lite wallet while online. The stored balance can then be used for offline payments without requiring a UPI PIN.

Industry sources indicate that point-of-sale terminal manufacturers will need to obtain NPCI certification before implementing offline UPI payments. The transaction data will be captured at the terminal and forwarded for verification once network connectivity is restored. This approach differs from NPCI's existing UPI Lite X, which supports offline transactions through NFC tags or QR codes.

The reported Rs 2,000 per-transaction limit appears to deviate from the Reserve Bank of India's (RBI) current framework for offline digital payments, which caps single transactions at Rs 500. The RBI's regulations prioritize consumer protection, requiring explicit customer consent for offline payments and placing liability for technical or security failures on the acquiring institution, not the customer. NPCI has not yet released specific operating rules for this new PoS program.