Digital Payments

The government of India had announced some measures yesterday to promote digital transactions as a part of a campaign to encourage people to digital, a month after the shock culling of high-value bank bills caused a severe cash crunch.

Signaling that using money is going to be costlier, Finance Minister Arun Jaitley came up with various encouragements ranging from fuel discounts, highway tolls and railway tickets to cheaper insurance cover.

The Government smashed opposition parties for its move on demonetization and it has repeatedly said that the decision was necessary to reduce black money and fake currency.

Visa, MasterCard and Rupay Launches QR Code Payment System for Making Cashless Transactions in India

In recent weeks, Prime Minister Narendra Modi also praised the benefits of a cashless society, giving examples of beggars using ATMs and also said that it might give some pain for the people due to the shortage of cash but in the long run it will benefit the country.

Jaitley said, “Before November 8, we were using more cash rather than digital transactions. There is a cost of managing in cash and excessive money can lead to misuses”.

Yesterday, Finance Ministry had announced that there would be no service tax on card transactions up to Rs 2,000. Just two months ahead of the Union Budget, Jaitley said petrol and diesel worth Rs 1800 crore was sold in a day, of which of about 20% is already being paid digitally.

After the demonetization had announced the figure went up to 40% in one month and the cash transaction of Rs 360 crore per day has got shifted to cashless methods.

No Service tax on Debit Card or Credit Card Transactions Up to Rs 2000

From January 1, 2017, consumers who pay digitally for their monthly or seasonal tickets suburban trains will also pay less. Apart from that, free accidental insurance cover of up to Rs 10 lakh will be provided to all those railway passengers buying their tickets online.

Not only this, if they make digital payments for all paid service of the railways includes catering, accommodation, retiring rooms among other things then they will be offered a discount of 5%.

The other big announcements include two point of Sale (PoS) machines each for one lakh villages with a population of less than 10,000.

 

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