Internet-free UPI payments coming to India: How will it work, transaction limits and everything you need to know

India's digital payments ecosystem could soon take another step towards uninterrupted transactions, even in places where mobile networks fail. The National Payments Corporation of India (NPCI) is reportedly working on a new offline UPI payment feature that would enable users to pay merchants without an internet connection by simply tapping their smartphones on compatible payment terminals.

According to a Business Standard report, the proposed system would rely on near-field communication (NFC) technology and is aimed at environments where connectivity is unreliable or unavailable, including aircraft cabins, underground metro stations and remote locations. NPCI is expected to begin certifying compatible point-of-sale (PoS) terminals from major manufacturers in 2026, paving the way for merchants to support the feature.

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If introduced, the system would mark another expansion of UPI's capabilities as India's real-time payments platform continues to process record transaction volumes.

How the proposed offline payment system would work

The reported feature is designed around UPI Lite, which allows users to maintain a small balance on their device for low-value transactions.

Before going offline, customers would first need to load money into their UPI Lite wallet while connected to the internet. Once the balance has been stored locally on the device, payments could be made by tapping the smartphone against a certified NFC-enabled PoS terminal, eliminating the need for a live internet connection or a UPI PIN at the time of purchase.

According to Business Standard, fintech industry sources said payment terminal manufacturers would first need NPCI certification before enabling support for the offline service. Once certified, companies could develop software that allows their terminals to accept these transactions.

Another source told the publication that the merchant terminal would record the customer's tap authorisation while offline and transmit the payment details for verification after internet connectivity is restored.

The report also said banks and third-party UPI application providers are independently building support for the feature within their own apps.

How it differs from UPI Lite X

Although the proposal represents a fresh expansion of offline payments, it is not India's first attempt at enabling UPI without internet access.

NPCI launched UPI Lite X in September 2023, allowing users to complete offline transactions using NFC-enabled smartphones. Existing guidelines published in January 2024 already support offline person-to-person transfers as well as merchant payments through NFC-enabled QR codes, soundboxes and payment stickers.

The key distinction in the newly reported system lies in the acceptance infrastructure rather than the payment method itself.

Instead of relying on NFC-enabled merchant stickers or QR-based hardware, the new solution would reportedly use conventional PoS terminals that continue functioning even when disconnected from the internet. This would allow merchants already using card-style payment terminals to potentially support offline UPI transactions after receiving the required certification.

NPCI's updated BHIM-UPI branding guidelines, released in June 2026, include visual standards for NFC-enabled merchant QR codes and soundboxes carrying "Scan or Tap to Pay" messaging. However, those documents do not mention any offline PoS certification programme.

Questions remain over transaction limits

One aspect of the reported feature remains unclear: the proposed transaction limit.

According to Business Standard, the offline PoS system under development may allow payments of up to Rs 2,000 per transaction. However, that figure does not align with the Reserve Bank of India's currently published offline payment framework.

Under RBI rules introduced in 2022 and updated most recently in December 2024, offline digital payments are capped at Rs 500 per transaction, while the maximum offline balance permitted on an instrument is Rs 2,000. Separately, UPI Lite currently supports transactions of up to Rs 1,000 with a wallet balance limit of Rs 5,000.

The RBI's National Strategy for Financial Inclusion 2025-30 also specifies that UPI Lite X is subject to a Rs 500 transaction cap, a cumulative daily limit of Rs 4,000 and a maximum balance of Rs 2,000.

As NPCI has not yet published operational rules for the reported offline PoS programme, it remains uncertain whether the new feature would require regulatory changes or operate under a separate framework.

Under the existing RBI guidelines, offline payments require explicit customer consent but do not require an additional authentication factor. Banks must notify customers once transactions are processed, while liability for technical or security failures at the merchant's end rests with the acquiring institution rather than the customer.

The development comes as UPI continues its rapid expansion. NPCI data shows the platform processed 22.72 billion transactions worth Rs 28.92 lakh crore in June 2026 alone. If offline PoS payments are rolled out, they could help extend UPI's reach into environments where connectivity has traditionally limited digital payments, offering consumers another cashless option when networks are unavailable.