New Delhi: The Union Cabinet on Wednesday approved a series of measures to promote payments through credit and debit cards, including withdrawal of surcharge, service charge and convenience fee on card and digital payments.
“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/organisations,” said a government statement. The government is promoting cashless transactions in the country to check domestic black money.
The government will rationalise merchant discount rate (MDR) on card transactions. It will be mandatory to pay through cards or internet banking beyond a prescribed threshold.
The government will rationalise telecom service charges for digital financial transactions and promote mobile banking. The Centre will also create necessary assurance mechanisms for quick resolution of fraudulent transactions so that people get confidence to transact cashless.
“For card/ 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,” said the statement.
Appreciating the move, Kumar Karpe, CEO, TechProcess Payment Services Ltd, stated, “With more than 800 million card transactions happening every month, we strongly support the approval of withdrawal of surcharge, service charge, convenience fee imposed on digital payments by the Union Cabinet. It will widen the scope of electronic transactions via cards, payment platform, mobile apps, net banking, electronic clearing service, National Electronic Fund Transfer (NEFT), Immediate Payment Service (IMPS)."
"New technologies like mobile will also eliminate the physical infrastructure investment needed to install POS machines. Tax incentives for accepting card payments will definitely contribute towards cashless transactions. This move is a step in the right direction to make Digital India a reality and encourage the economy to go cashless. This will boost the economy by avoiding revenue leakage from the system,” he further added.
