The government’s think-tank NITI Aayog will be asking states to submit data on digital payments within the next 10 days so that they can be ranked on the basis of initiatives taken to promote less-cash economy, reports the Press Trust of India.
Promotion of less Cash economy
The November 8 demonetization drive which started as a means to curb black money in the country changed to a drive for a less-cash economy and release of BHIM App, 14444 Helpline. Government also proposed Cash Tax for promotion of cashless transactions. It has also announced two programmes which will give cash awards to customers and merchants through a lucky draw. Daily, weekly and mega awards worth Rs 340 crore will be given to merchants and consumers on April 17. The digital payment modes such as UPI, USSD, Aadhaar Enabled Payment System (AEPS) and RuPay Cards will be accepted for the lucky draw.
There was appreciable, but not exponential, growth in digital payments, if data from the Reserve Bank of India is to be believed. The RBI has been giving out provisional data on digital transactions since the demonetization on daily basis. The RBI’s data itself is incomplete and does not include lot transactions made on many wallets and includes card transactions from only four banks.
If you look at data Mobile Banking (5 banks), Debit and Credit card transactions (4 banks, point of sale transactions only), Wallets / PPIs (only for goods and services), IMPS, NEFT, USSD, UPI, NACH (National Automated Clearing House), comparing the average transactions and amount-transacted per day for the 29-30 day reported period in December, and the month of November, growth in terms of volume of transactions was only 26.1%, and amount transacted declined 5.9%.
Charges on transactions reduced
Last month, bank interchange fee for merchants, known as the merchant discount rate (MDR), was reduced for debit cards, the RBI said. Following the demonetization of Rs 500 and Rs 1000 notes, the RBI said that from January 1st to March 31, 2017, banks will be able to charge merchants the following:
– For transactions up to Rs 1000, MDR charged to merchants shall be capped at 0.25% of the transaction value.
– For transactions above Rs 1000 and up to Rs 2000, MDR shall be capped at 0.5% of the transaction value.
RBI also informed that all banks and Prepaid Payment Instrument (PPI) issuers will not levy any charges on customers for transactions up to Rs 1000 settled on the Immediate Payment Service (IMPS), USSD-based *99# and Unified Payment Interface (UPI) systems.