Offline Digital Payments: An Opportunity for Inclusion

By Veritran - April 12, 2022 - Category : Ecosistema de pagos

Internet connectivity remains one of the biggest barriers to the roll-out of electronic transactions in rural areas, despite efforts to narrow the infrastructure gap 

The implementation of offline digital payments is a means to increase

financial inclusion in rural areas around the world,

where Internet connectivity remains low.  

According to a study published in August 2021 by the

World Bank

, of an estimated

123 million

Latin Americans living in rural areas, only four out of every 10 have connectivity options, compared to seven out of 10 in urban areas. 

Other regions also continue to see substantial disparities in Internet access between urban and rural areas. For example, only 59% of rural households in Europe had access to fixed broadband in 2019, compared to 86% of households overall. And availability in the US was 77.7% in rural areas in 2018, compared to 94.4% nationwide, according to a report by

the Organization for Economic Co-operation and Development (OECD


These limitations restrict

digital money transfers

, among other financial transactions.

This is where the development of technologies that enable

offline electronic payments

becomes an opportunity for banks to enter new, underserved

markets in remote areas



Some companies have developed alternatives that, while not widely known, are starting to promote this offline approach


In India,

where 65% of the population is rural

, the National Payments Corporation began experimenting with offline payments in January of this year

under the name UPI Lite

, which is used for small transactions.

One of the options at the forefront of this trend is SIM Overlay, which extends the functions of the SIM card and enables it to

make payments without Internet data

. Another technology is OTA (over the air), which enables network updates without access to 3G or 4G networks. 

These initiatives are supported by

other communication networks that validate operations without requiring an Internet connection. 

However, there are also solutions in which transactions are stored for a period of time until a connection is re-established. 

FinTech company

Square has developed an "offline" mode for its point-of-sale terminals. 

Although the solution was designed for overcoming temporary connection failures, it permits card payments to be processed automatically and allows a period of up to 72 hours to validate the transaction—in other words, until Internet access has been re-established.

This solution can be used to store payments when signal availability is low, although it still doesn’t represent a solution to the structural problem of limited digital connectivity.


Financial institutions can capture new markets by utilizing offline solutions while continuing to provide basic services to remote communities that so badly need them. And as we know, digital payments are often the gateway to other digital products such as savings accounts and credit.  

In Colombia, for example, Mastercard introduced the

Café Paga

program that seeks to "make it easier for coffee producers to access and use formal financial services and digital platforms in a more consistent manner.”

Mastercard emphasizes that digital tools help people in rural areas to carry out essential daily activities such as topping up phones without having to travel to urban areas.

The company also points out that

electronic payments

establish a "link" between users and financial institutions that empowers the most disadvantaged populations while introducing them to a world of transactional possibilities.

Closing the gap between rural and urban populations is an ongoing challenge. Banks can do their part by

using technologies that extend Internet connectivity or seek offline solutions

to overcome geographical issues.

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