You might soon be able to make digital payments without an internet connection—even during a flight or in underground tunnels. A recent report indicates that a new feature for the Unified Payments Interface (UPI) is in the works; it will allow users to make payments to another device or a merchant’s point-of-sale (PoS) terminal without needing an internet connection.

A famous publication reported that users will be able to pay at offline merchant terminals using NFC (Near-Field Communication), a short-range wireless technology that operates faster and more securely than Bluetooth over short distances. Notably, the transactions will reportedly be capped at 2,000 rupees.

According to the report, customers will first need to load funds online into a digital wallet hosted on the device itself, known as UPI Lite. They can then use that balance in locations without internet access or at offline terminals, without needing to enter a UPI PIN.

However, to implement these new features, the National Payments Corporation of India (NPCI)—the organisation that manages UPI—will likely certify the country’s PoS device manufacturers to enable offline UPI payments starting this year.

Offline digital payments are not entirely new

Offline UPI payment is not a brand-new concept, although the idea has existed in a more limited form for years. Services like *99# and UPI 123Pay already allow users to send money without an active internet connection by using a USSD code or a simple phone call.

Here lies the difference: even these existing methods require some form of network—whether it is a GSM signal for the USSD code or a telephone line for the voice call. The new NFC-based UPI feature might not even require that. Provided the device is NFC-enabled, the payment can be processed exclusively wireless communication, requiring no mobile network connection whatsoever.

The *99# service, meanwhile, works on any GSM phone, including both smartphones and basic mobile phones. This makes it useful for people who do not have access to a smartphone. The service uses USSD, which does not require mobile data, and is available in 13 languages, including Hindi and English, across 83 banks. Users can make transactions of up to ₹5,000 through this service.

To make a payment, users simply dial *99#, select their bank, choose the “Send Money” option, enter the recipient’s UPI ID or mobile number, enter the amount, and confirm the transaction using their UPI PIN.

For feature phone users, UPI 123Pay provides another option through voice instructions. Users call the designated number, choose one of the 12 available languages, and follow the audio prompts to enter the recipient’s details and payment amount. The transaction is then confirmed using the UPI PIN. Merchant payments through this service are limited to ₹5,000 per transaction, while the daily limit can go up to ₹1 lakh.

Both services are available around the clock, including public holidays. They have also played an important role in expanding digital payments to people living in areas with limited internet access and those who do not use smartphones. The upcoming NFC-based UPI system could take this a step further by allowing payments without requiring an internet or mobile network connection at the time of the transaction.