RBI Permits Use Of HDFC Bank-Crunchfish AB's Offline Payments
The Reserve Bank of India (RBI) has approved regulated entities like banks and non-banking financial companies (NBFCs) to adopt an offline digital payments solution developed by HDFC Bank in partnership with Sweden's Crunchfish AB.
According to RBI's notification, the HDFC Bank-Crunchfish AB product has successfully exited the Regulatory Sandbox (RS) and is now open for adoption by Regulated Entities, provided they comply with relevant regulatory standards.
The 'Offline Retail Payments' product facilitates offline transactions for customers and merchants, addressing regions with limited network capabilities and aiming to boost digital payment adoption. For instance, merchants can receive instant payment confirmations offline and settlements occur once they or the customers reconnect online.
HDFC Bank initiated a pilot in February, partnering with Crunchfish, after being selected by the regulator in September 2022 for the 'On Tap' application facility in the 'Retail Payments' theme of the Regulatory Sandbox. The pilot ran for a limited time across 16+ Indian cities, capping offline transactions at Rs 200.
During testing, HDFC Bank collaborated with IDFC First Bank to showcase transactions between different banks and engaged M2P Fintech to develop customer and merchant apps for the pilot phase.
Parag Rao, HDFC Bank's Country Head for Payments Business, Consumer Finance, Digital Banking and Marketing, emphasised the solution's potential to drive financial inclusion in remote areas by enabling network-independent transactions. This move aligns with RBI's 2019 introduction of the Regulatory Sandbox, aimed at fostering responsible financial innovation for consumer benefit and operational efficiency in the sector.
