Noida-based start-up Eroute Technologies plans to roll out a UPI-based offline payments solution that will facilitate digital payments without internet connectivity. Last month, the company got the RBI’s approval to test the solution as part of the first cohort of regulatory sandbox on retail payments.
Abhishek Saxena, an alumnus of IIT, BHU and co-founder and COO of Eroute, said the company is eyeing commercial availability by the middle of the year.
The technology, which is being used in China and Kenya and also being tried out in Japan, involves a smart card which acts as a SIM overlay. Once installed, a feature phone user will have a SIM toolkit-based user interface available on their feature phone through which they can do fund transfer, merchant payments and bill payments.
“In India, there are around 500 million feature phone users who can be brought into the digital payments fold using their phones. Connectivity is still a challenge in parts of the country and even smartphone users often do not get good internet. So, RBI came out with a sandbox and invited companies who have solutions for feature phone users,” said Saxena.
“We are doing a pilot with a limited audience as of today as per the requirement of sandbox. Once we get the results, we will then introduce the concept for commercial use. We have worked with NPCI so that users can use UPI on feature phones. The solution is telecom agnostic,” said Saxena, adding that the company is in discussion with financial institutions for deployment.
Founded in October 2018, Eroute Technologies is promoted by Saxena, Sanjeev Pandey, former group president of Yes Bank and Jason Ho, chairman of Taisys Technologies, a Taiwan based company that has developed technical expertise on sim overlay.
Phone users today already have a non internet based alternative to digital payments. A user can dial *99# on their phones to access their UPI linked accounts through unstructured supplementary service data (USSD), a GSM protocol. But stability and user experience has been a key challenge. Moreover, the option is not available for Jio subscribers on account of LTE technology.
“USSD has not been successful and right now it is almost at a dead end. There were so many session breaks. User experience was also a big use,” said Saxena adding that these challenges will be addressed through sim overlay.