Digital cash now available on feature phones, to expand financial inclusion

For the first time in India, IDEMIA, a global technology provider in identity technology (it makes the SIMs and the e-Sims platforms for mobile devices), is partnering with Airtel Payments Bank and HMD Global, the makers of Nokia mobile phones, to expand the use of central bank digital currency (CBDC issued by the Reserve Bank of India) on feature phones even without a network connection.

The three companies will be working to introduce an advanced offline payment system over the next few months that would facilitate the use of the digital rupee on feature phones, enabling financial inclusion for over 300 million mobile users without smartphones.

In an interview with Business Standard, Jerome Ajdenbaum, vice president of Cryptocurrencies and Digital Currencies at IDEMIA based in Paris, said: “Our focus is on bringing offline payment to CBDC. Offline payment means that you will be able to pay anytime, anywhere, even if you don’t have a network connection. So, when you want to start with digital cash, of course, you don’t want to lose the great advantage of cash. Currently, digital cash is available only to those who have a smartphone.”

Ajdenbaum says that it is a new technology and the company, like in India, is undertaking pilot projects all across the world. It is closely working with the Reserve Bank of India to enable this service. Under the pilot project, it plans to get feedback from users and look at ways to improve it, and if it works, extend it to a larger canvas of partners.

To enable the service now, one of course needs a secure SIM card from IDEMIA in the phone, which enables the transactions between two devices in digital cash through their QR codes. Of course, you require the application pre-loaded on the phone, which will provide the interface between two individuals. One can choose between a SIM which is used both for connectivity and an extra layer on top of it, which enables digital transactions. Or you can take a SIM card which is only meant for enabling the digital money transfer, as many phones have provision for dual SIMs.

Ajdenbaum says that what they have created is an open protocol, which will be able to work with all feature phones and even with smartphones. Similarly, the platform can work with any bank apart from Airtel Payments, which is approved by the Reserve Bank of India. The government could send you a paper with a QR code, through which you could get a direct transfer of money on schemes. “At the moment, we are undertaking a pilot with our partners. Once this works out, the protocol will be open for everyone to use,” says Ajdenbaum.

He also points out that the size of the transaction is still to be determined, but it will clearly be capped for small transactions. He points out that over 90 per cent of central banks in the world are working on CBDC.

Digital cash now will be available to feature phone users in a move towards expanding financial inclusion.

Nearly 300 million feature phone users will benefit

Customers can use the service within a few months as work is ongoing between the partners and also RBI

The plan is to undertake a pilot project with the two partners and if successful open the protocol to all device makers and banks and customers.

IDEMEA working on the new technology in various countries like with Bank of England in Nigeria, Japan, China amongst others.