Wednesday 25 May 2022
- Advertisement -

No surcharge on card and digital transactions; Cabinet pushes for cashless ecosystem

Join Sirf News on

and/or

New Delhi: Union Cabinet chaired by Prime Minister Narendra Modi has given its approval for introduction of steps for promotion of payments through cards and digital means. The move aims at reducing cash transactions. Several short term (to be implemented within one year) and medium term measures (to be implemented within two years) have been approved for implementation by the government ministries, departments, and organisations.

Promotion of payments through cards and digital means will be instrumental in reducing tax avoidance, migration of government payments and collections to mode, discourage transactions in cash by providing access to financial payment services to the citizens to conduct transactions through card and digital means and shifting payment ecosystem from cash dominated to non-cash or less cash payments.

The essential features of the proposals for promotion of payments through cards and digital means include steps for withdrawal of surcharge, service charge, convenience on card, digital payments currently imposed by various government departments and organisations and introduction of appropriate acceptance infrastructure in government departments, organisations; rationalization of Merchant Discount Rate (MDR) on card transactions and a differentiated MDR framework for some key transaction segments; mandating payments beyond a prescribed threshold only in card or digital mode; introduction of formulae linked acceptance infrastructure by the stakeholders of certain card products; rationalisation of service charges for digital financial transactions; promotion of mobile banking; and creation of necessary assurance mechanisms for quick resolution of fraudulent transactions and review the payments ecosystem in the country.

Background

The infrastructure of card and digital payments is growing, but remains modest in comparison to cash payments. For card and digital payments to increase, they should be easy to use, readily available and accepted, should not impose any undue financial burden on the merchant and user, and should offer an appropriate level of security.

While the payment system initiatives taken in the form of Electronic Clearing Service Scheme, National Electronic Funds Transfer, Real Time Gross Settlement Scheme etc. have been impressive, the benefits of modern card and digital payment systems are yet to reach all sections of the society and be accepted across the length and breadth of the country. Current experience and evidence indicates that the penetration and success of modern card and digital payment products and services is concentrated to a large extent in the tier-l and tier-ll locations of the and mostly to those citizens who have access to the formal banking channels.

The introduction of the Payment and Settlement Systems Act, 2007 has resulted in deeper acceptance and penetration of modern card and digital payment systems in the country, Aadhaar Enabled Payment Systems (AEPS) has been brought to effect to leverage upon biometric verification and a domestic card network namely, RuPay.

The Reserve Bank of India has also recently approved licences for setting up of Payments Banks with the objective of greater financial inclusion by the payments banks by providing small savings accounts and payments/ remittance services to migrant labour workforce, low income households, small businesses, other unorganised sector entities.

Contribute to our cause

Contribute to the nation's cause

Sirf News needs to recruit journalists in large numbers to increase the volume of its reports and articles to at least 100 a day, which will make us mainstream, which is necessary to challenge the anti-India discourse by established media houses. Besides there are monthly liabilities like the subscription fees of news agencies, the cost of a dedicated server, office maintenance, marketing expenses, etc. Donation is our only source of income. Please serve the cause of the nation by donating generously.

Join Sirf News on

and/or

Similar Articles

Comments

Scan to donate

Swadharma QR Code
Advertisment
Sirf News Facebook Page QR Code
Facebook page of Sirf News: Scan to like and follow

Most Popular

[prisna-google-website-translator]
%d bloggers like this: