India’s digital payments ecosystem is preparing for a major upgrade as the National Payments Corporation of India (NPCI) develops a new offline UPI payment system that will allow users to make tap‑and‑pay transactions without internet access. The feature is designed for locations with poor or no connectivity — including aircraft cabins, underground metro stations, remote towns, and rural pockets — marking one of the biggest expansions of UPI’s capabilities since its launch.
The proposed system is built around UPI Lite, a lightweight wallet that stores a small balance locally on the device. Users would first load money into their UPI Lite wallet while online. Once the balance is stored, payments can be made offline by tapping a smartphone on a certified NFC‑enabled PoS terminal, eliminating the need for mobile data or Wi‑Fi.
Industry sources told Business Standard that payment terminal manufacturers will need NPCI certification before enabling offline support. After certification, companies can develop software allowing their terminals to accept tap‑and‑pay UPI Lite transactions. When a customer taps their phone offline, the terminal records the authorisation locally and later transmits the payment details for verification once connectivity is restored.
If rolled out nationwide, the system could significantly boost digital inclusion. UPI already processes record transaction volumes, and offline capability would extend its reach to millions who face connectivity barriers. It also opens new use cases — from in‑flight purchases to metro ticketing and emergency payments during network outages.
This development positions India to further strengthen its role as a global leader in real‑time payments.