The Reserve Bank of India is prepping an offline digital payments pilot to encourage the migration from cash in rural areas that lack internet connectivity.
India, the third biggest economy in Asia, has taken a lead on the use of digital cash and, according to a 2019 Credit Suisse forecast, digital payments will grow five-fold to more than $1 trillion by 2023.
However, lack of internet connectivity or simply low speeds, especially in remote areas, are hampering the efforts to go digital and boost financial inclusion.
The RBI is now encouraging banks and non-banks players to develop offline payment technology, on a pilot basis, for cards, wallets and mobile devices, stressing that they will need built-in safety measures.
The pilot plan comes in the heels of a $33 million RBI contribution to the creation of a Payments Infrastructure Development Fund (PIDF) with the aim of improving the digital and physical point-of-sale infrastructure in remote regions of the continent.
The central bank is also creating an innovation hub, which "will act as a centre for ideation and incubation of new capabilities which can be leveraged to create innovative and viable financial products and/or services to help achieve the wider objectives of deepening financial inclusion, efficient banking services, business continuity in times of emergency, strengthening consumer protection, etc."