How to Make Digital Payments in a Remote Area Without Internet?


To ensure that digitalization reaches the last mile in rural India, the government and the private sector have developed various technological innovations that do not require an internet connection. The latest list is the Reserve Bank of India’s UPI123Pay initiative.

These technological innovations are low-cost payment and cash solutions that facilitate low-ticket-size transactions in areas where Internet connectivity and smartphone availability are challenging.

In addition, they eliminate the need to have a debit or credit card, which some people in remote area without Internet that lack of knowledge or fear of fraud. These services can be accessed mostly through feature phones using facilities like SMS and OTP.

Here are some digital payments without the Internet solutions that promise to make life easier and ensure financial inclusion in rural India.

Offline payments through featured phones

Transactions that do not require Internet or telecommunication connectivity are called “offline digital payments”. Face to face (proximity mode) payments can be made offline through any channel or medium, such as cards, wallets and mobile devices.

The Reserve Bank of India stated that these transactions would not require an additional Authentication Factor (AFA). Since the transactions take place offline, the customer will receive a post-delay warning (via SMS and e-mail)—transactions per transaction of Rs. 200 and for all transactions until replenishes the account balance. Subject to an overall limit of 2,000, credit can only be filled in online mode.

According to the statement, the framework integrates the responses of pilot experiments on offline transactions conducted in different country departments from September 2020 to June 2021. The offline mode of payment can be enabled after obtaining the unambiguous consent of the customer.

Consumers will continue to enjoy protection under the circular limited liability provisions and resort to the Reserve Bank’s integrated ombudsman scheme to redress grievances. Offline payments can be made using featured phones through interactive voice response (IVR).

The users need to dial a specific number through their featured phone that connects them to an interactive voice response. The mobile money payment solutions then educate them to take next step for initiating the payment. They need to input a number to continue and authorize the transaction.

Point of Sales Payment solution

The Reserve Bank of India (RBI) has recently launched an interactive IVR (Interactive Voice Response) -based Unified Payment Interface (UPI) service called ‘UPI123pay’, which can be used by people who have a smartphone or are not active.

Internet connection Users of this service will have to make a missed call only to the pre-determined IVR number displayed on the merchant’s counter and enter their UPI PIN when asked.


UPI123pay is a huge leap towards the mass integration and expansion of digital payments for an estimated 400 million non-smartphone users. It democratizes digital banking and eliminates dependence on the Internet. Anyone, even with a simple feature phone, will now be able to use digital banking.

The proximity voice-based payment feature in the UPI123Pay application uses high-frequency ultrasound waves to transfer data between mobile phones, so it does not require the Internet.

SMS Code Payments

Many banks and fintech offer a payment solution called “SMS Pay”. This sends a payment link to the customer’s mobile number, which can help direct payment to the merchant’s bank account.

This payment method is also used by e-commerce companies so that people can pay for purchases on delivery digitally instead of in cash. SMS payment in mobile wallet app development allow merchants to accept payments by sending SMS to their customers with a payment link.

Once registered with the company providing this facility, merchants can send a link with payment details, and customers can pay using UPI or any other payment mode. SMS payments enable citizens to make convenient and hassle-free cashless transactions.

QR Code-Based Payments

Many companies have adopted QR (Quick Response) code-based payment solutions. QR code payments are almost as easy as clicking a picture. All you have to do is scan the QR code using any mobile payment app that supports one and then make the payment to the merchant.

When the QR code is scanned, the horizontal and vertical patterns of the matrix are decoded by the software on your smartphone and converted into a string of letters. When opened as a scan Pay, these characters provide a string command that provides details to the host (app or browser).

Point of Sale (POS) machines

A POS machine is one of the most advanced payment acceptance devices in terms of wallet application development. These have been around for a long time. POS machines enable the user to pay by debit or credit card.

This eliminates the hassle of carrying large amounts of cash for both the customer and the merchant. The biggest advantage of a POS machine is its ability to provide last mile digital payment routes and the option to go cashless.

It supports all types of credit and debit card payments. And issues receipts while maintaining transactions. Since the process is digital, it eliminates human errors and helps manage and track inventory in real-time.

Payments through ATMs

Aadhaar based ATMs and micro-ATMs solve this challenge to a large extent. Although rural India is largely cash-driven, the number of ATMs in remote areas is much lower than in urban areas. Mr. Dilip Modi, a founder of rural fintech company Spice Money, says, “There are about 650,000 villages in India, but there is only one ATM in 10 villages on average.”

Aadhaar based ATM

Many fintech companies have launched Aadhaar Enabled Payment System (AEPS) services, which work like micro-ATMs and are provided using laptops and biometric scanners. The user needs an Aadhaar number and linked bank account to withdraw or deposit cash through this service.

Using this service, you can also transfer funds to other Aadhaar linked bank accounts. AEPS is a model of bank-based financial services through which we can conduct online financial transactions using micro-ATMs with the help of Aadhaar-based authentication.

It can be used by certifying all the account holders whose Aadhaar card is linked to their bank account. AEPS only supports transactions between Aadhaar-linked bank accounts.

Micro ATMs

Many banks and companies are also working towards a network of micro-ATMs secured by Business Correspondents (BC). Micro ATMs are devices used by merchants/nanopreneurs to provide basic banking services, including cash withdrawals.

Mostly these merchants are owners of local grocery stores, and they act as a point of contact for conducting instant cash transactions. Micro ATMs are connected to banks across the country. They help people withdraw, deposit, transfer and check their balance using their feature phone OTP-based service.

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