NEW DELHI: Debit cardholders may soon be able to request a Visa card that allows them to store up to Rs 2,000 in the chip itself. This will allow transactions to take place without the need for a network connection.
Visa has already established a proof of concept (PoC) for the stored value card for offline payments. It is being done in collaboration with payment solutions firm Innoviti. The Proof of Concept was done in collaboration with Yes Bank and Axis Bank. Stored value cards differ from prepaid cards. Here payment authorization occurs on the network cloud.
The chip in this new Visa debit card will have a stored value of Rs 2,000, with a daily spend limit of Rs 2,000 and a per-transaction limit of Rs 200 — the limits currently mandated by the RBI.
If the balance is insufficient, the transaction will be declined. Making this proposition appealing to both cardholders and merchants. Merchants will also benefit from reduced friction and the risk of payment failure.
Visa’s solution is the first of its kind, and it is well-positioned to enter the Indian market.
The RBI has urged banks to develop solutions for offline digital transactions so that they can continue to take place in the face of poor telecom infrastructure or network outages.
Digital payments are heavily reliant on mobile networks, and a regional outage could result in significant transaction failures. Offline payments using Visa cards are expected to facilitate the transition of payments from cash to digital due to the widespread use of debit cards in India.
“The lack of internet connectivity has hampered the democratisation of digital payment acceptance in the country because all existing payment technologies require real-time connectivity for authentication and authorisation. Offline payments are a quick, dependable, and low-cost solution to this problem that has the potential to change the way payments are made,” said Rajeev Agrawal, MD & CEO of Innoviti Payment Solutions, India.