“It Is Essential That The Union Government Should Subsidise Transaction Charge” Secretary General, CAIT
He further said that Government drafted an incentive proposal in August 2015 which spells out certain tax benefits and waiver of transaction costs charged by banks
Conference of Indian Industry (CII) today organsised a conference on ‘Digital and Cashless Economy’ in New Delhi. “In order to make India a less cash economy, the faster adoption of digital payments by trade and commerce as also by public at large and to achieve the goal, the transaction charges on digital payments needs to be subsidised by the Government directly to the Banks.”, said secretary general, CAIT, Praveen Khandelwal. at the conference. Khandelwal also opined that a digital payment promotion board should be set up and National Payment Corporation ( NPCI) should run UPI, BHEEM etc, and a separate regulatory authority should be set up for monitoring and regulating the payment Industry. He also said “When an open network is being created as a policy by the government then the payment industry should also be given an open network ensuring the best services to the users. it is essential that the union government should subsidise transaction charges levied on digital payments to the banks directly.”
he further added, “The burden of transaction charges is one of the major deterrents in adoption and acceptance of digital payments in the country, and as such steps are needed to incentivise usage of digital payments. It will also help the efforts for bringing the informal economy to the formal economy. A large amount is being spent by the government in the printing of currency and its security and logistics.” Subsidising the transaction charges to the banks will promote larger usage of digital payments at all levels and substantially fulfill the vision of prime minister Narendra Modi to convert cash-rich India to less cash India. He also suggested that on the usage of ATMs beyond three times in a month, a nominal fee should be levied for subsequent cash withdrawals at ATMs. All sorts of debit and credit cards and all other modes of digital payments including POS terminals, M-POS, mobile wallets, mobile applications, QR codes, UPI and Aadhar-enabled applications should be brought under the ambit of incentive schemes.
“The nonbanking finance companies and microfinance Institutions should also be brought under the landscape of digital payments to install white-label POS terminals by encouraging a scheme to subsidize POS terminals directly or indirectly across both urban and rural areas.” added Khandelwal. He further said that Government drafted an incentive proposal in August 2015 which spells out certain tax benefits and waiver of transaction costs charged by Banks. While urging the Government to implement said proposals, he said that proposal to provide incentives to shopkeepers accepting payments in business transactions through digital payments will encourage traders to embrace the e-payment system.