RBI Working on Enabling Offline Digital Payments to Help Consumers
RBI Working on Enabling Offline Digital Payments to Help Consumers in Rural Areas Join the Formal Economy -The prestigious Reserve Bank of India (RBI), the nation’s financial institution that controls the issue and supply of the Indian rupee, is reportedly performing on an offline digital transactions pilot, so as to urge more consumers in rural areas, without internet connections, to adopt virtual payments.
India is notably the third-largest economy in Asia, behind China and Japan. India’s annual GDP is roughly around $3 trillion, although it’s going to be reported lower for the past fiscal year thanks to the COVID-19 outbreak.
India has taken the lead on adopting digital payments, consistent with a 2019 Credit Suisse report. It’s now expected that digital payments will grow around 5x to over $1 trillion by 2023. Recent reports from India confirm that digital payments are on the increase, which can are accelerated thanks to the Coronavirus crisis.
But the shortage of internet connectivity or slow connection speeds within the remote areas of India is preventing or hampering the efforts to encourage the adoption of digital payments – which may cause greater financial inclusion.
The RBI is now focused on encouraging local banks and non-bank financial service providers to make offline payment processing systems. The reserve bans want local entities to figure on offline payment pilots for cards, wallets, and mobile devices. The RBI noted that these payment platforms must have appropriate, built-in safety measures.
The RBI’s pilot has come after it made a $33 million contribution to the nation’s Payments Infrastructure Development Fund (PIDF). The fund aims to reinforce India’s digital and physical point-of-sale infrastructure, especially in remote areas of the country.
The RBI also will be establishing a technology innovation hub. it’ll function a middle for “ideation and incubation of latest capabilities which may be leveraged to make innovative and viable financial products and/or services.”
These new products will specialize in “achieving the broader objectives of deepening financial inclusion, efficient banking services, business continuity in times of emergency, strengthening consumer protection, etc.,” the RBI noted.
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