“Pay Without Internet”: NPCI Develops Offline UPI Tap And Pay System Using NFC Technology

India's digital payments backbone is preparing for a major upgrade that could let millions of users complete transactions without any internet connection at all. The National Payments Corporation of India, widely known as NPCI, is reportedly developing a new near field communication based feature that would allow customers to simply tap their smartphone on a compatible point of sale terminal to complete a payment, even when neither the phone nor the terminal has network access.

According to reports, the new system will build on UPI Lite, the lightweight wallet feature already used for small value payments. Under the proposed setup, users would first load money into their UPI Lite wallet while connected to the internet. Once funds are stored on the device, the balance can then be used to pay at merchant terminals purely through near field communication, similar to how contactless debit or credit cards work today. Notably, users are expected to complete these transactions without entering a UPI PIN, since authentication would rely on the preloaded wallet itself.

Industry reports suggest the feature could support transactions of up to two thousand rupees, opening up fresh use cases in places where connectivity is patchy or entirely absent, such as flights, underground metro networks, and remote rural regions. NPCI is expected to begin certifying compatible point of sale devices from major terminal manufacturers later this year, according to sources cited by Business Standard, though the organisation has not yet issued an official statement confirming the rollout timeline.

This is not NPCI's first attempt at offline payments. The UPI Lite X feature, introduced in 2023, already allows two near field communication enabled Android devices to exchange money directly without either party needing internet access, though that facility currently caps transactions at five hundred rupees. Separately, users without smartphones or reliable data have long relied on the star nine nine hash USSD service, which lets people dial a code from a registered mobile number to make basic UPI transactions up to five thousand rupees, and on UPI 123Pay, which uses an interactive voice response system to serve feature phone users through simple voice prompts.

Interestingly, the reported two thousand rupee ceiling for the new tap and pay feature does not fully align with existing central bank rules. Under the Reserve Bank of India 's offline digital payments framework, first introduced in January 2022 and last revised in December 2024, a single offline transaction is currently capped at five hundred rupees, with a maximum offline balance of two thousand rupees permitted per instrument, suggesting further regulatory clarity may be needed before the feature goes live.

If rolled out successfully, the move would mark a significant step toward closing the gap between traditional card based contactless payments and India's real time UPI ecosystem, which processed over eighteen billion transactions worth more than twenty four lakh crore rupees in a single month last year. For a country where large sections of the population, particularly in rural areas, continue to face unstable mobile data and patchy connectivity, an internet free tap and pay option could meaningfully widen access to digital finance and bring millions of underserved users more firmly into India's fast expanding cashless economy.