This design note sets out the Bank of England’s emerging thinking on offline payments within any potential digital pound. It sets out the different types of offline payments and the different motivations for offline payments. This design note builds on the offline experiment report published in April 2025. This note is exploratory and does not represent final policy or design decisions.
Design notes
The Bank of England (the Bank) and HM Treasury are committed to our work on a digital pound being informed by dialogue with the public, business, and civil society.
To support this engagement, the Bank is publishing design notes, which set out the Bank’s emerging thinking on specific topics related to a digital pound. These notes explore matters we are considering during the design phase for a digital pound, on which we wish to give stakeholders visibility of our emerging thinking. Publishing design notes allows us to be transparent about our work on a digital pound, and to prompt discussion on specific topics with stakeholders at an early stage and in an exploratory manner.
The Bank is closely involved in ongoing work on the National Payments Vision, including through the Retail Payments Infrastructure Board. This design note is not intended to pre-judge any outcomes that may emerge out of this wider work.
Design notes do not represent final policy or design decisions, nor do they represent policy proposals upon which we are formally consulting. On completion of the design phase and taking account of evolutions in the wider payments landscape, the Bank and the Government will decide whether to proceed to build a digital pound. If the decision was taken to build a digital pound, it would only be introduced once Parliament had passed the relevant primary legislation.
As is the case with all our work during the design phase, no decision has yet been taken on whether to build a digital pound.
Any digital pound, if launched, should support some offline payment scenarios. These are payments where there is no internet connection or where that connection is not reliable or performant enough.
To do this, the digital pound design would enable deferred offline payments − where the payment goes through sometime after the transaction is initiated, for example once one party is back online or via submitting a batch of files for overnight payment processing. This covers common situations like transport or unattended terminals such as those often found in car parks. This is comparable to functionality offered by cards today.
The digital pound design would also be flexible so that device offline payments − where money moves directly between devices without the online system seeing the transaction until reconnection, could be supported in the future. These payments are innovative and could gain increasing relevance and utility over time, but at present the benefits they offer are uncertain, and the approaches to control the risks they introduce into the system are unproven at scale. Our current thinking is that this functionality would not be available at launch, but we will continue to explore device offline payments and review this position.
Context
Offline payments are transactions completed between two parties without real-time connectivity to the digital pound ledger, allowing payments to continue when connectivity is unavailable or unreliable.footnote [1] As retail payments in the UK continue to evolve and become increasingly digital, ensuring continuity during connectivity disruptions is an important design consideration.
For the digital pound, we define two types of offline payments, which are also shown visually in Figure 1 (deferred) and Figure 2 (device).
- Deferred offline payments: A payment instruction is created while both parties are offline, but funds remain on the ledger and move sometime later after the transaction takes place. This could be when at least one party is back online and reconnects to the ledger, or via submitting a batch of files for overnight payment processing.
- Device offline payments: Value is stored directly on a device and transferred to another device at the point of payment, without the online system and the ledger seeing the transaction until reconnection. Once received, funds can be immediately spent again, subject to monitoring and risk based and technological limits.
Figure 1: Deferred offline payments
Figure 2: Device offline payments
This terminology is specific to the work of the digital pound but the definitions and concepts are broadly consistent with international usage.footnote [2] This note focuses on the policy motivations and design considerations for both types of offline payments, building on the technical exploration in our April 2025 offline payments experiment report.
This work builds on our commitment in the consultation paper to explore offline payments. It takes on board feedback in the consultation response document, the Technology Working Paper response document, and from the offline payments working group. Feedback from across these sources emphasised the potential importance of and use cases for offline payments in the UK. They also noted that offline payments introduce risks that need to be carefully managed and offered some functional and technical approaches to balance these considerations.
Case for offline payments
There are clear and proven use cases for deferred offline payments. For example, on transport or at unattended terminals where payments need to happen quickly or without a constant internet connection. This technology already exists today, and people expect it to work. If the digital pound didn’t support these scenarios, it could harm user experience and slow adoption. The transport use case was highlighted as part of the Design note – Product strategy that we published in July. Further potential use cases for deferred offline payments are shown in Table A.
In contrast, device offline payments don’t generally exist in today’s payments ecosystem. They could be an innovative feature and could be a payment method of the future.footnote [3] But at present the case for device offline payments is not yet clear, and the benefits look uncertain when set against the complexity of building them, the level of maturity of the technology, and the additional risks that they introduce into the ecosystem.
Nevertheless, device offline payment solutions continue to evolve. A digital pound would be designed so that device offline payments could be added later if the benefits become clearer and if the technology continues to develop to the point where we have confidence that it can safely be deployed at scale.
How offline payments compare to existing payment optionsfootnote [4]
Deferred offline payments are like giving someone a cheque. The payer creates an instruction to pay offline, but the money stays in their account on the system. The funds cannot be onward spent and are only moved once either party reconnects, and the system can complete the transaction, like cashing a cheque.
Device offline payments are more like using cash. The money is taken off the online system and stored on a device, then transferred directly to someone else’s device at the time of payment. These funds can be immediately onward spent within risk based and technological limits. The online system doesn’t see the transaction until a device reconnects sometime after the transaction. Like with physical cash, there is a need to guard against counterfeit funds being spent, and the risk of loss due to theft. Safeguards can help to manage these risks, including secure hardware and software, transaction limits and tamper detection, but their efficacy is as yet unproven.
Future opportunities
Device offline payments are not present in mainstream retail payments today, but they could unlock new possibilities over time. Their relevance will depend on how the UK payments landscape evolves.
- Resilience and contingency planning: As society and the economy becomes more digital the impact of disruptions to connectivity becomes greater. Some jurisdictions are exploring offline payments in the context of providing added resilience during potential disruptions which cause longer outages including those lasting days rather than minutes in length.footnote [5] Device offline payments are better suited than deferred offline payments for longer outages given they support onward spending of funds without the need to immediately return online. This may be more relevant for areas of the UK where disruptions are more likely to leave communities disconnected for longer periods of time.footnote [6] This would still require some preparation, as funds need to be transferred to a device in advance of an outage.footnote [7] Although is it not a core motivation, enhancing resilience has been noted as a potential benefit of the digital pound. The National Payments Vision also includes the importance of robust and resilient infrastructure. This may mean the relevance and importance of device offline payments could increase over time, as opportunities to enhance the resilience of the payment ecosystem continue to be explored.
- Platform for innovation: Keeping the digital pound open to device offline payments creates opportunities for private sector experimentation and innovation. Any device offline payment solution as part of the digital pound would be based on a single standard to ensure interoperability between services offered by different intermediaries. On top of this standard, the private sector would be able to innovate, for example by experimentation with new form factors, developments in secure hardware, and targeting specific services or scenarios such as remote settings or event environments. Most of the complexity would sit on devices, where the private sector has a comparative advantage, and where their experimentation could highlight potential benefits, demonstrate feasibility and highlight different approaches to managing some of the risks associated with device offline payments.
The Bank will continue to explore the future opportunities for device offline payments. We will monitor pilots and real-world examples of device offline payments, as these are likely to provide the most insight on the level of maturity of the technology involved, and the best way to manage potential risks that they introduce into the ecosystem. Many providers are continuing to develop device offline payment solutions which may become more mature and may credibly demonstrate their viability at greater scale.
This approach preserves optionality: a digital pound can meet today’s needs while staying ready to incorporate device offline, if technology, policy or market conditions change the balance of potential benefits and risks. Understanding from the digital pound context can also be applied to work on retail payments innovation in the UK more broadly.
Different offline payment types in detail
The rest of the note provides further details and analysis on deferred and device offline payments respectively.
Deferred offline payments
Deferred offline payments already support many high-volume, connection limited or time sensitive settings in the UK. People make use of this functionality today, as shown by the use cases set out in Table A, and the technology is proven. The digital pound design can support these payments. Supporting deferred offline payments functionality in the digital pound design would support many existing everyday payments in the UK.
To make them work safely, there must be clear rules for what happens if a payer lacks funds when the system reconnects. Deferred offline payments may not be appropriate in some scenarios, and so the default in many payment scenarios is that they would not be available. Merchants would need to explicitly choose to accept deferred offline payments, configuring this option and any additional rules and limits with their PIP. Merchants would also need to have a clear understanding of the risks they take in accepting deferred offline payments, and that, absent any specific risk sharing arrangements, they take liability for any failed deferred offline transactions. The system should include measures such as retry processes, transaction limits and fraud controls to help manage these risks.
Table A: Use cases for deferred offline payments
Use case | Description |
|---|---|
Transport | Payments at train, metro or bus terminals where connectivity is limited, there are high performance needs, or the final fare is not known upfront. |
Unattended terminals | Payments at standalone machines like vending machines or at car parks that lack internet connectivity. |
Sporadic outages | Payments during short-term internet disruptions in stores or venues. |
Performance | High-throughput environments such as stadiums or festivals. |
Batching | Situations where batching transactions avoids roaming or connectivity costs. |
Device offline payments
Motivations
In the UK, a clear case for device offline payments has not yet been established.
The motivations for device offline payments may vary depending on the jurisdiction. The common motivations cited by other jurisdictions for device offline payments in CBDC design and retail payments more generally are resilience, inclusion, privacy and performance. A further common motivation is providing ‘cash like’ functionality, but that term is usually referring to one or more of these different motivations. As cash has many different properties, it is better to be specific on the motivation being considered, as it may be that some ‘cash like’ features are not relevant or desired in some circumstances.
While many of the above motivations are relevant, in the context of the UK, the case for device offline payments is not yet clear. This is because the benefits are uncertain and hard to quantify when weighed against the complexity of implementation, the level of maturity of the technology, and the additional risks compared with online payments. As highlighted in the Bank’s offline experiment report, there are also user experience challenges with device offline payments that need to be resolved. Many of these goals can be achieved more safely and efficiently through other design features. Table B summarises this assessment.
Table B: Assessment of motivations for device offline payments
Motivation | What it aims to solve | Potential benefit | Potential concerns | Practical alternatives |
|---|---|---|---|---|
Resilience | Keep payments running during connectivity disruptions, including longer outages. | Specific locations or significant disruptions. In general, outages are rare; UK coverage is high. | Requires pre-loading funds; outages unpredictable; added operational risk. | Improve connectivity; maintain cash access; use deferred offline where appropriate. |
Inclusion | Help people who are digitally or financially excluded to pay. | Users with connectivity or accessibility needs. | Does not address core barriers; internet and device access. | Smart device accessibility. |
Privacy | Limit what others in the system know about users and transactions. | Use cases for reduced data sharing. | Could increase fraud and theft risk, decrease consumer protections. | Privacy by design in online model; tiered KYC for low-risk use. |
Performance | Maintain payments during significant transaction volume peaks. | Use cases eg festivals or major events with high transaction volume and low bandwidth. | Requires preloading Still need a highly performant online platform regardless. | Engineer platform for high throughput; use deferred offline for speed critical use cases. |
Design approach
The digital pound design should be open to support device offline payments in the future, even if, at present, we do not expect that they will be part of the functionality available at launch. More of the complexity for device offline payments sits on the device rather than in the core platform. That means we can preserve the option to support them in the digital pound design in the future with limited impact and cost on the other initial functionality within the digital pound design.
Analysis and experiments completed to date give us a sound understanding of how device offline payments could work from a technical perspective. If we chose to proceed with device offline payments later, the development and implementation within the devices themselves would generate much of the cost and complexity. This would come from the need for devices to be able to manage double spending and counterfeiting risks. Prior work has highlighted a heavy reliance on secure elements or alternative measures that can demonstrate an equivalent level of tamper resistance.
The Bank should only look to undertake this next layer of more costly and complex work if the case for device offline payments has become clearer.
Beyond technology, several questions would need to be resolved before device offline payments could be used at scale, in particular liability and consumer protection. Clear rules would be required for what happens if a device is lost or stolen, if errors during an offline transaction occur, or if malicious behaviour is detected during or sometime after an offline transaction. This is so that users know what protections they have and so that disputes between users and intermediaries can be settled consistently. The delay between when an issue occurs during an offline payment, and when it is subsequently detected sometime later once one of the devices returns online, adds to the complexity and user experience challenges this could create.
Next steps and how to engage
Offline payments are a complex area, and we expect approaches to them to continue to evolve during the digital pound design phase. We will continue to engage with a wide range of stakeholders to test our assumptions and better understand the opportunities and risks.
As the design phase progresses, further design notes and technical experiments will support ongoing development of the digital pound blueprint. These will help clarify how core features could work in practice and how different elements of the ecosystem could interact. The position taken in the blueprint on offline payments will continue to evolve based on this work.
We welcome feedback on the content of this note, particularly on:
- Our position on device offline payments and whether there are other use cases or motivations we should consider.
Please send comments to CBDC@bankofengland.co.uk
Further updates on the design phase and related publications are available on The digital pound page of our website.
Transactions where at least one party is online, typically the payee, are still considered to be online transactions. This is because the online party would be able to connect to the digital pound ledger and allow an online transaction to take place.
For an overview of the concept of the different types of offline payments see both Technology Solutions to Support Central Bank Digital Currency with Limited Connectivity: A Review of Existing Approaches and Project Polaris: handbook for offline payments with CBDC. While the terminology used for deferred and device is different (staged and intermittent respectively) they represent equivalent types of offline payment. The Bank does not have an equivalent for ‘fully’ offline, as there is an expectation in the digital pound design that, due to risk based or technological limits, there will always be a need to eventually return online.
This type of offline payment is being explored by other central banks and technology providers and has been the subject of some small-scale proof of concepts.
The analogies between cheques, cash, and the digital pound given here are for illustrative purposes only. There are many substantive differences between the digital pound and payments made with cheques or cash.
The Central Bank of Denmark have explored offline payments as a contingency option given the high dependence of Danish citizens on digital means of payment: Offline card payments as a payment contingency measure.
A high profile example of this was when undersea cable damage led to disruption of internet services in Orkney and Shetland in the UK, which meant that many shops were unable to take card payments: Cable damage disrupts internet services in Orkney and Shetland – BBC News.
This preparation could be seen as similar to how some people carry some cash with them as a backup payment method in case there are issues with their primary method of payment.