Can India’s Next Digital Payments Revolution Catalyze a Fundamental Change in the Country’s Sports Betting Environment?


RBI Set for a New Digital Payments Revolution Beyond UPI with Offline Modes

After the massive and globally acclaimed success of the Unified Payments Interface (UPI), the Reserve Bank of India (RBI) has announced the framework of what’s to be the country’s next revolution in digital payments. The development will benefit owners of feature phones and people who cannot rely on a stable internet connection throughout the day, mostly in rural and semi-urban areas, with the introduction of offline digital payments.

As per 2020 data by the World Economic Forum (WEF), nearly half of India’s population, or almost 70 crores of people, do not have access to the internet and can now join the world of secure digital payments.

RBI’s framework will allow offline digital payments with a transaction limit of up to ₹200, and a ₹2,000 overall limit, which have been set for customer protection. Further protection is brought about by the requirement for such transactions to take place only face-to-face, i.e. in the presence of the owner of the account or of the beneficiary. The payments will not require One-Time Passwords (OTP) or any Additional Factor of Authentication (AFA), but the users will receive notification via a text or email message.

Sports Betting in India is Still Mostly Illegal and Offline

According to data from a 2021 report on Indian Sports Betting by Esse N Videri Media (ENV Media), a real money gaming market consultancy firm, estimates on the yearly size of the desi sportsbook market range between ₹3 and ₹10 lakh crore ($41 to $150 billion), with most of it still happening in cash over illegal and black market channels.

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The number of regular bettors in India is estimated at 14 crore, with 37 crores of people wagering around big sporting events. A single One-Day International match (ODI) with the participation of the Indian national cricket team attracts illegal bets to an amount exceeding ₹1,500 crore ($200 million).

At the same time, international sports betting platforms provide desi punters with a legal option to bet on their favorite sports, teams and athletes, which is an alternative to black market channels run by illegal bookies or done via encrypted chat groups.

As a safer alternative to the underground sportsbook market, offshore betting operators and sites offering sports and cricket betting tips working in India have been growing in visibility and reach over the last few years.

Further innovations by such betting companies making use of the new offline modes for digital payments provided by RBI can reach whole cohorts of new people and limit the size of the black market by taking away money flows and traffic from illegal agents.

If people are able to subscribe to betting tips over SMS and place a bet over their feature phone, the market demand and the impact on society by black market bookies will be limited. Further along the line, such innovations can be used to catalyze a fundamental transformation of the Indian sports betting environment to a fully legal and safe sportsbook ecosystem with proper customer protection rules.

Secure Digital Payments over Smart and Feature Phones

The new regulatory framework by RBI’s National Payment Corporation of India (NPCI) will enable offline digital payments to be made both from a smartphone or a feature phone that has no internet capabilities.

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Indian smartphone users will be able to set up a special offline payments wallet within the UPI app they have installed on their device to be used for making small payments when no internet is available.

A truly groundbreaking innovation will come to users of feature (pre-smart) phones whose number in India is reportedly around 35 crore. Even though sales of feature phones are on the decline, from 8 crore in 2020 to 7-7.5 crore in 2021, a substantial part of the country still relies on phones with no mobile data capabilities.

The offline digital payments service will be based on an Intelligent Voice Response (IVR) system where the customer would listen to instructions and press buttons on their phone’s keypad, with instructions being available in a variety of regional languages. The service will be a part of the UPI ecosystem and will use Dual Tone Multi-Frequency (DTMF) signaling and two-factor authentication (2FA) to allow peer-to-peer (P2P) transactions.


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