You will soon be able to use debit cards without any network
A proof of concept (PoC) for the stored value card for offline payments has already been established by Visa in partnership with the payment solutions company Innoviti. The PoC was executed in partnership with Yes Bank and Axis Bank. Stored value cards are different from prepaid cards where authorization takes place in the network cloud.
The chip on this new Visa debit card will contain a stored value of a daily spending limit of Rs 2,000 and will have a per transaction limit of Rs 200 – the limits imposed by the RBI currently. If the balance is insufficient, the transaction will be refused, which makes this proposal attractive for cardholders and merchants. Merchants are also expected to earn income through reduced friction and the risk of payment failure. Visa’s solution is the first of its kind and equipped to enter the Indian market.
The RBI has urged banks to come up with solutions for offline digital transactions so that these can continue to take place with poor telecommunications infrastructure or during network outages. Digital payments are heavily dependent on mobile networks and an outage could lead to major transaction failures in a region. With the high penetration of debit cards across India, offline payments using Visa cards are expected to ease the transition from cash payments to digital.
“The lack of internet connectivity has limited the democratization of digital payment acceptance in the country, as all existing payment technologies require real-time connectivity for authentication and authorization. Offline payments are a fast, reliable and inexpensive way to solve this problem which can change the way payments happen, ”said Rajeev Agrawal, Managing Director and CEO of Innoviti Payment Solutions, India.