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NEW DELHI: India is developing a Unified Payments Interface (UPI) capability that would allow a customer to pay at a merchant’s point-of-sale (PoS) terminal even when neither device has internet access, reports Business Standard, citing three people familiar with the matter.
The National Payments Corporation of India (NPCIL) is likely to begin certifying PoS devices made by leading terminal manufacturers, according to the report. The proposed system would use near-field communication technology and allow payments of up to Rs 2,000 by tapping an NFC-enabled phone on an offline terminal.
The feature is designed for locations where connectivity is unavailable or unreliable, including aircraft cabins and underground train networks, the Business Standard report said.
Customers would first load money into their on-device UPI Lite wallet while connected to the internet. They could then use that balance at an offline terminal without entering a UPI PIN, according to the report.
“PoS companies will need a certification from NPCI to accept UPI in an offline setting. They can create an application on top of it after they get certified,” a person at a fintech firm with knowledge of the matter told Business Standard.
A PoS terminal is the merchant-side hardware commonly used to accept debit and credit cards, prepaid cards and mobile-wallet payments. Under the proposed system, the terminal would store the payment authorisation and forward it once connectivity returns.
“This is an NFC-driven use-case for UPI apps. You will tap using the app. Even if the terminal is offline, you can pay up to Rs 2,000. It will capture the authorisation and send it later for verification once the network is restored,” a second person told Business Standard.
Banks and third-party UPI application providers are also working to add the capability to their apps, according to the person.
The proposed feature is not NPCI’s first use of NFC or its first documented offline merchant-payment flow. It would, however, extend such payments to certified conventional PoS terminals.
NPCI introduced UPI Lite X in September 2023 to support transactions when mobile connectivity is unavailable. Unlike UPI Lite, which avoids real-time access to the remitter bank’s core banking system but normally requires connectivity, Lite X was designed for fully offline payments.
NPCI’s January 2024 UPI Lite X guidelines illustrated offline person-to-person payments between NFC-enabled phones as well as person-to-merchant payments made by tapping an NFC-enabled QR code, soundbox or sticker.
The capability reported now differs in the acceptance hardware: the merchant would receive the payment through an NPCI-certified PoS terminal, including when that terminal is disconnected.
NPCI’s Bhim-UPI branding guidelines updated in June also contain design specifications for NFC-enabled static and dynamic QR codes and soundboxes carrying “Scan or Tap to Pay” instructions. Those guidelines cover merchant-facing presentation but do not announce the reported offline PoS certification programme.
How the Rs 2,000 cap compares with RBI rules
The reported Rs 2,000 per-payment ceiling differs from the limits in the Reserve Bank of India’s currently published rules.
The RBI’s offline digital-payments framework, introduced in January 2022 and last updated in December 2024, caps a general offline transaction at Rs 500 and the total outstanding offline limit on an instrument at Rs 2,000. It separately permits UPI Lite payments of up to Rs 1,000, with a total balance limit of Rs 5,000.
The Business Standard report describes Rs 2,000 as the ceiling for each transaction under the capability being developed. NPCI has not yet published operating rules for the reported PoS programme explaining how that limit would fit within the existing RBI framework.
Under the current RBI framework, offline payments require the customer’s explicit consent and can be completed without an additional authentication factor. Issuers must notify customers after receiving the transaction data, while the acquiring institution bears liability for technical or security problems at the merchant end. Customers retain access to the RBI’s Integrated Ombudsman Scheme.
UPI processed 22.72 billion transactions worth Rs 28.92 lakh crore in June 2026, according to NPCI’s official product statistics.