Making a UPI payment at a physical store could become easier even when your smartphone does not have an active mobile internet connection. A new UPI Tap and Pay facility announced by the Reserve Bank of India (RBI) is designed to bring a contactless-style payment experience to UPI users.

The feature allows customers with an NFC-enabled smartphone to make payments at compatible NFC-enabled Point-of-Sale (POS) terminals simply by unlocking their phone and tapping it on the payment machine.

RBI Governor Sanjay Malhotra announced the facility on September 10, 2026, as part of new initiatives aimed at improving convenience, customer support and security in India's digital payment ecosystem.

However, there is an important distinction: Tap and Pay does not mean UPI can work completely offline everywhere. The user's smartphone may not require its own mobile internet connection for the transaction, but the compatible POS terminal needs connectivity to process the payment.

What Is UPI Tap and Pay?

UPI Tap and Pay is designed to make UPI transactions at physical stores resemble contactless card payments.

Instead of opening a UPI app, scanning a QR code and manually entering payment information, an eligible user can unlock an NFC-supported smartphone and tap it against a compatible POS terminal.

The payment can then be processed using the terminal's connectivity.

This could be particularly useful in places where a customer's mobile data connection is weak or unavailable but the merchant's POS terminal remains connected.

How Does UPI Tap and Pay Work?

The process described in the source is relatively straightforward.

A customer needs an NFC-enabled smartphone, while the merchant must have a compatible NFC-supported POS terminal.

The customer unlocks the smartphone and brings it close to or taps it against the payment terminal. The POS machine then uses its internet connection to process the transaction.

The facility can support different types of UPI-linked accounts, including RuPay credit cards linked to UPI, according to the report.

Availability may depend on compatible devices, participating banks, payment applications, accounts and merchant terminals.

Up to ₹5,000 Without Entering UPI PIN

Another important feature involves small-value payments.

According to the source, users can complete eligible transactions of up to ₹5,000 without entering a UPI PIN. For transactions exceeding ₹5,000, the customer would need to enter the UPI PIN through the supported payment process at the POS terminal.

This could make low-value purchases at physical stores faster by reducing the number of steps needed to complete a transaction.

Users should still check the payment amount carefully before approving any contactless transaction.

Does It Mean UPI Is Now Completely Offline?

No. This is one of the most important points for users to understand.

The facility does not make the entire UPI network work without an internet connection.

Instead, the source explains that the customer's phone may not require active mobile internet because the POS terminal's connectivity can be used to process the payment.

Therefore, a compatible payment terminal and the required supporting infrastructure are still necessary.

This also means Tap and Pay should not be confused with a universal offline UPI service that would work on every merchant terminal.

RBI Also Introduces MyUPI

Alongside Tap and Pay, another major initiative highlighted in the announcement is MyUPI.

According to the source, MyUPI is an AI-powered customer-support platform developed by the National Payments Corporation of India (NPCI).

It is based on NPCI's FiMI small language model and is designed to bring information related to a user's UPI transactions and AutoPay activity across different banks and UPI apps into one place.

The platform is intended to provide customers with more visibility and control over their UPI activity rather than functioning only as a traditional customer-support service.

Safety Switch Could Help When an Account Is at Risk

One of the notable MyUPI tools described in the source is a Safety Switch.

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