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How Payments in India will Transition to Digital

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The Cabinet has approved to remove service charge, user charge and convenience fee paid for online and card payments, the move to remove service charge is to encourage people to use digital transactions. Digital payments will be instrumental in reducing tax avoidance, migration of government payments and collections to a cashless mode. To give a perspective, 569 million transactions were made till December of the current financial year, with payments worth Rs 67.75 lakh crore.

The largest e-commerce site, Indian Railway Catering and Tourism Corporation, earned Rs 1,100 crore in 2014-15, of which Rs 350 crore was from e-ticketing. A daily 550,000 tickets were booked on the site. Other steps approved by the Cabinet include rationalisation of telecom service charges for digital financial transactions and promotion of mobile banking. The move primarily discourages transactions in cash by providing access to financial payment services through cards and digital means, went the statement. Creation of assurance mechanisms for quick resolution of fraudulent transactions and reviewing the payments system in the country have also been approved. Read more

Sweekar S

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