The National Payments Corporation of India (NPCI) is developing a new way for people to make UPI payments without an internet connection. This new system will allow users to tap their phones on payment terminals for transactions up to ₹2,000. It targets places like flights and underground trains where internet access is often poor or unavailable. This initiative aims to make digital payments more convenient and widespread across India.[swarajyamag+2]
How Offline Tap-to-Pay Works
The upcoming feature uses Near Field Communication (NFC) technology. Customers will use NFC-enabled smartphones to tap on certified Point-of-Sale (PoS) terminals. This method is similar to how people use contactless credit or debit cards. A key part of this system is the UPI Lite wallet. Users must first load money into their UPI Lite wallet while they are online. Once funds are in the wallet, they can make payments offline without needing a UPI PIN.[swarajyamag+5]
When a transaction happens offline, the PoS terminal stores the payment information. It then sends this data for verification once it reconnects to the internet. This ensures that even if both the customer's phone and the merchant's terminal are offline, the payment can still go through.[swarajyamag+4]
Expanding Digital Access
This new development is a major step for India's digital payment system. It specifically helps in environments with no or weak network coverage. This includes aircraft cabins, underground metro stations, and remote areas. By enabling payments in such challenging locations, NPCI wants to strengthen UPI's role as India's main payment method.[swarajyamag+2]
A person from a fintech firm familiar with the matter told Business Standard that PoS companies will need NPCI certification to accept offline UPI payments. They can then build their own applications on top of this system. NPCI is expected to begin certifying PoS devices from major manufacturers in 2026.[whalesbook+2]
Building on Past Innovations
This is not NPCI's first effort to enable offline payments. In September 2023, NPCI launched UPI Lite X. This feature allowed fully offline transactions between two NFC-enabled smartphones. Thecurrent plan expands this capability to merchant PoS terminals. This allows merchants to accept offline payments for the first time using existing payment hardware.[business+2]
Existing offline UPI methods already include the USSD-based *99# service for feature phones and UPI 123Pay. UPILite also supports low-value offline payments from a pre-loaded wallet. However, the new tap-to-pay system for PoS terminals is different because it allows for a higher transaction limit and works even when the merchant's terminal is offline.[business-standard+7]
Transaction Limits and Future Impact
The proposed transaction limit for this new tap-to-pay feature is ₹2,000. This is higher than the Reserve Bank of India's (RBI) general offline digital payment cap of ₹500 per transaction. It alsoexceeds UPI Lite X's current limit of ₹500 per offline transaction. This higher limit makes the new system suitable for various purchases in transport hubs.[swarajyamag+6]
In June 2026, UPI processed 22.72 billion transactions totaling ₹28.92 lakh crore. This shows the massive scale and importance of UPI in India's economy. The new offline tap-to-pay feature aims to further close the gap between UPI and traditional card networks. It makes UPI more versatile.[republicworld+4]
This advancement is expected to simplify digital payments for millions of users. It will offer a reliable payment option in situations where internet connectivity is a challenge. Banks and third-party UPI application providers are working to integrate this functionality into their apps. The official rollout timeline and detailed implementation guidelines from NPCI are still awaited.[business-standard+2]
