National Payments Corporation of India (NPCI) has announced the roll-out of a new “offline” version of the Unified Payments Interface (UPI) system, allowing users to make transactions without active internet connectivity. Under this offering, each transaction will carry a fee of ₹0.50.
What the Service Offers
- The service can be accessed by dialing *99# from a registered mobile number, leveraging USSD, in areas where internet connectivity is weak or absent. The Times of India
- The current transaction limit for this offline UPI mode is up to ₹5,000 per transaction.
- The fee is ₹0.50 per transaction for using this offline mode.
- This functionality is available both for feature phones and smartphones (via USSD fallback)
Why This Matters
- Inclusion for underserved areas: Many rural or remote users who don’t have stable internet can now use UPI-type payments.
- Lowering barriers: A very low fee (₹0.50) makes this accessible for small everyday transactions.
- Digital payments acceleration: Helps NPCI and India’s financial ecosystem expand digital payments into markets where connectivity is constrained.
- Backup/contingency option: For times when mobile data is unavailable, this offers another route for payments.
Background & Context
The UPI system, managed by NPCI, is India’s flagship real-time payments infrastructure supporting billions of transactions monthly. NPCI Over time, NPCI has introduced innovations like UPI Lite, offline/feature-phone payment channels, feature phone support (*99#) and more. This new service builds on those evolutions by formally launching a low-internet version with a transaction fee.
Key Details & Considerations
- Fee structure: ₹0.50 per transaction — small but non-zero. Users will need to accept this.
- Transaction cap: Up to ₹5,000 per offline transaction currently.
- Device compatibility: Works via USSD on feature phones, and likely via compatible apps/USSD for smartphones without data.
- Bank/PSP support: Availability will depend on banks/payment service providers (PSPs) enabling this channel.
- User education: Users will need to know about *99# etc and how to use it.
- Security & risk: Offline/USSD channel may have different risk profile (connectivity issues, device constraints) and NPCI/banks will need clear protocols.
What to Watch For
- Rollout speed: When all banks/PSPs will enable it and across how many states/regions.
- Uptake: How many users adopt this offline mode vs traditional online UPI.
- Merchant acceptance: How many merchants will accept payments via this channel.
- Cost model: Will ₹0.50 per transaction change over time?
- Impact on digital payments volumes: Will this help bring more users into the digital ecosystem?
- Operational challenges: USSD session failures, timelines, user support issues.
Conclusion
The launch of this offline UPI service priced at ₹0.50 per transaction by NPCI is a meaningful step toward deepening financial inclusion and relaxing reliance on internet connectivity for digital payments in India. While the fee and limits are modest, the broader implication is significant: enabling a payments ecosystem that works even when connectivity is weak. For users, banks and merchants — the innovation opens up new possibilities.
