NPCI is working on a Near Field Communication (NFC)-based UPI Lite offline payment solution which will allow users to make tap-and-pay transactions of up to ₹2,000, even without an active internet connection.
The initiative is to make digital payments more convenient and available, especially for remote areas that have weak internet access or not. NPCI intends to have the same experience as contactless card payments by integrating UPI Lite with NFC technology, and simply making payments with smartphones on compatible payment terminals.
Unlike traditional UPI payments which require an internet connection for real-time authentication, the proposed NFC-enabled UPI Lite system will enable offline transactions. This is expected to improve payment convenience in rural areas, underground metro stations, crowded public events and other areas with weak network coverage.
Under the proposed framework, users will be able to preload money into their UPI Lite wallet and use those funds for low-value offline transactions. The ₹2,000 transaction limit is designed to cover everyday purchases such as groceries, public transport, food, fuel, and convenience store payments.
The development is one of the first steps in the digital payments evolution in India. UPI has already transformed the country’s financial ecosystem by enabling instant bank-to-bank transfers, while UPI Lite was launched to make small-value transactions quicker by reducing bank authentication for every payment.
The introduction of NFC technology would also reduce transaction time even further as it would not need to scan QR codes to make payments. Users could just unlock their phones with NFC technology and tap them to a payment terminal to complete the transaction in seconds.
An industry expert said the new feature could dramatically help in driving digital payments in areas where internet connection is still problematic. A better transaction success rate in times of heavy network congestion could also be achieved.
NFC-based offline UPI Lite payments could be used for merchants as this technology might mean faster customer checkouts, shorter waiting times, and more reliable payments on a customer’s behalf. For small businesses too, the technology can also allow more small businesses to adopt digital payment infrastructure.
NPCI has been continuously expanding the Unified Payments Interface with applications such as UPI Lite, UPI Circle, credit on UPI and cross-border payments. The offline payment feature for NFC will be in line with the vision of making digital payments easy, secure and universal.
When launched, the NFC-based UPI Lite offline tap-and-pay system will further cement India’s position as a global leader in digital payments and give customers a much safer and more stable payment experience for payments up to ₹2,000.
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