HDFC Bank Launches Offline Digital Payments Pilot Project Across 16 Cities

HDFC Bank has launched a pilot project under the Reserve Bank of India’s (RBI’s) Regulatory Sandbox program in partnership with Crunchfish, to test offline digital payments for merchants and customers. This program is also known as ‘OfflinePay’ and will be carried out across 16 cities as part of the pilot test. During the pilot, the offline transaction amount would be limited to up to Rs. 200 per transaction.

HDFC Bank said in a press statement that the ‘OfflinePay’ program will enable customers and merchants to make and receive payments even when there is no mobile network.

Digital Payment typically requires one party (either the customer or the merchant) to be online. This limits the usage of such payments to areas with good data connectivity.

“‘OfflinePay’ brings in the unique capability where both customer and merchant can be fully offline and yet do the transaction. Merchants can receive an instant payment confirmation even in an offline mode. As soon as either the merchant or the customer goes online, the transaction gets settled,” HDFC Bank said in a press release.

HDFC Bank said it is the first bank to launch a digital payment solution in a completely offline mode. This can boost adoption of digital payments even in smaller towns and rural areas with poor network connectivity, while in the urban centres, it can enable cashless payments during large public events, fairs and exhibitions.

It will work in times of network congestion, at underground metro stations, parking lots, retail stores with network blind spots, and even in airplanes, sea-ferries, and trains with no network.

“HDFC Bank is pleased to work under regulator’s guidance and partner with Crunchfish Digital Cash to launch ‘OfflinePay’, an industry-first digital solution. This innovation will accelerate financial inclusion in remote areas by enabling adoption of digital payments as both merchants and customers can do transactions without any network. HDFC Bank is committed to bring more digital innovations and payment solutions to its customers and merchants,” Parag Rao, country head, payments business, consumer finance, digital banking, and marketing, HDFC Bank, said in a statement.

HDFC Bank said it has been working with RBI to pilot offline digital payments under the payments cohort of RBI’s Regulatory Sandbox program. The pilot, if successful, will provide the basis for RBI’s guidance and regulatory support in providing offline digital payments based on ‘Crunchfish Digital Cash’ platform to the payment ecosystem of India, it said.

As of now, HDFC Bank plans to roll out this service across 16 cities for a four-month period.

HDFC Bank said it would also allow merchants and users of even other banks to experience ‘OfflinePay’ through an invitation link. To showcase off-us transactions with other bank’s customers and merchants, HDFC Bank has partnered with IDFC First Bank.

Earlier in September 2022, RBI had approved HDFC Bank’s application in partnership with Crunchfish to access the Regulatory Sandbox.

Crunchfish Digital Cash AB is a subsidiary of Crunchfish AB, a publicly listed company on Nasdaq First North Growth Market in Stockholm, Sweden.