RBI: HDFC Bank’s digital payments solution for merchants, customers in low network areas shortlisted for on-tap application facility | The Financial Express

RBI: HDFC Bank’s digital payments solution for merchants, customers in low network areas shortlisted for on-tap application facility

Technology for MSMEs: The RBI had announced opening of the on-tap application facility in October last year.

RBI: HDFC Bank’s digital payments solution for merchants, customers in low network areas shortlisted for on-tap application facility
The product ‘Offline Retail Payments’ by HDFC Bank-Crunchfish AB allows merchants and customers to pay and receive payments in offline mode, the central bank said.

Technology for MSMEs: The Reserve Bank of India (RBI) on Monday announced selecting private lender HDFC Bank, in partnership with Sweden-based payments company Crunchfish AB, for the test phase of the on-tap application facility for the theme ‘Retail Payments’ under the regulatory sandbox.

The product ‘Offline Retail Payments’ by HDFC Bank-Crunchfish AB allows merchants and customers to pay and receive payments in offline mode, the central bank said in a statement. “The solution aims to boost adoption of digital payments in areas of no or low network by enabling transactions without the need to have a network connection.”

The RBI said it had announced the opening of the on-tap application facility in October last year to help in continuous innovation and engagement with innovators and respond to the dynamics of evolving fintech ecosystem in the country. Retail payments was one of the areas under an indicative list of innovative products, services, and technology by RBI that could be considered for testing under the regulatory sandbox.

Comments from HDFC Bank weren’t immediately available for this story.

While cashless payments in the country have exploded, thanks to multiple payment options including UPI, bank transfer, card payments, e-wallets, etc., one of the major operational challenges faced in its growth has been the slow internet speed, particularly in rural areas, affecting both buyers and merchants. Nonetheless, the digital payments market in India recorded around 71 billion payments in FY22, as per the data company Statista. The total transaction value is expected to grow at 22.03 per cent CAGR during the 2022-27 period resulting in a projected total amount of $53.59 billion by 2027. 

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According to a report by BCG and Matrix Partners India in August 2022, the next wave of disruption in the payments space is likely to come from the rapid explosion of digital merchant payments, as 75 per cent of merchants are now covered via QR, and through greater penetration and UPI enablement of credit cards.

Meanwhile, apart from HDFC Bank-Crunchfish AB, the other entity selected for the test phase of the on-tap application facility was the biometric solution company Precision Biometric India. Its product ‘InnaIT Key Solution for Banking’ offers solution enabling biometric tokens which can be used for secure password-less authentication and Additional Factor Authentication (AFA), instead of an OTP, for logging into the internet or mobile banking, the statement said.

Also read: Self-Reliant India fund: Rs 1,600 crore invested in 88 MSMEs, says MSME Secretary BB Swain

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