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News updates on digital payment promotion

This topic provides latest news on digital payment promotion in the country.

On-boarding of self organized small and medium businesses / traders on digital payment initiatives

On-boarding of self organized small and medium businesses / traders on digital payment initiatives is a project entrusted to the National Institute of Electronics and Information Technology (NIELIT) by the Ministry of Electronics & Information Technology with the objective of promoting digital payments among traders.

The objective of these training programmes is to understand and adopt simplified digital payment mechanisms like UPI, USSD, BBPS, AEPS etc. in a convenient manner, which would contribute towards establishing digital economy and convey the benefits of digital payments to traders through capacity building programs. About 13500 small and medium unorganized / self organized businesses/ traders are targeted. The Confederation of All India Traders (CAIT) shall be mobilizing traders and trade union leaders for training on digital payment initiatives. Under this programme, NIELIT shall be organizing 5 Regional Workshops at Delhi, Jaipur, Kolkata, Mumbai, Chennai and 30 State Workshops and 100 DigiDhan Camps, all over India.

Source : PIB

NPCI, Mastercard, Visa develop Bharat QR

Bharat QR, a world first interoperable and low cost acceptance solution, developed by National Payments Corporation of India (NPCI), Master card, and Visa.

Bharat QR was devised based on the direction set by the Reserve Bank of India (RBI) in September 2016 and its Payments Vision 2018 , which outlines innovation, interoperability, and security as the three pillars to facilitate India’s transition to a less – cash society.

Bharat QR has three key benefits. First, consumers will not need to scan different QR codes at the same merchant provided by the different payment networks. Second, merchants will only need to display one QR code at the storefront or through the acquiring bank’s mobile application. Third, the underlying specification for Bharat QR can be implemented in other countries to deliver a globally interoperable solution.

Source : NPCI

Nearly 10 lakh citizens get reward money over Rs.153.5 crore for embracing Digital Payments

According to the latest figures released by the National Payments Corporation of India (NPCI), which has been executing the schemes, nearly 10 lakh consumers and merchants have been disbursed over Rs.153.5 crore as reward money till 20th February, 2017.

Highlights:

  • Among the 9.8 lakh winners are more than 9.2 lakh consumers and 56,000 merchants.
  • 120 consumers have won prize money worth Rs. 1 lakh each
  • 4,000 merchants have won Rs. 50,000 prize money each
  • Maharashtra, Tamil Nadu, Uttar Pradesh, Andhra Pradesh and Delhi have emerged as the top five states/ Union Territory(s) with maximum number of winners
  • Active participation was seen among females and males across regions
  • Winners belong to diverse socio-economic backgrounds, from farmers, merchants, small entrepreneurs, professionals, housewives, students to retired persons.
  • While majority of the winners are in the age group of 21 to 30, a significant number are also above 60 years of age.
  • The diversity in age of winners is from 15 to 66 years, challenging the notion that the old find it difficult to embrace technology to adopt digital payments.

NITI Aayog has been organizing DigiDhanMelas at 110 cities across India, beginning December 25th, 2016. It will go on every day until April 14, 2017. Till date, 59 DigiDhanMelas have been organized to take the digital payments movement to the masses across the country.

Source : PIB

Measures for promotion of cashless payments in Union Budget 2017-18

Finance minister Arun Jaitley proposed a slew of measures to hasten India’s movement to a cashless economy. Among them are a ban on cash transactions more than Rs 3 lakh, tax breaks for the creation of a cashless infrastructure, greater usage of non-cash modes of payments and making Aadhaar-based payments more widespread.

In the Union budget, the government has sought to incentivize greater use of non-cash transactions for small businesses by lowering the tax rate on presumptive income to 6% from 8% for all non-cash transactions.

Tax exemptions have been announces for manufacturers of point-of-sale (PoS) card readers, mobile PoS (mPOS), fingerprint readers and iris scanners.

The budget also announced the setting up of a separate payments regulator within the Reserve Bank of India (RBI) to regulate the payments space. A computer emergency response team for the financial sector (CERT-Fin) is also to be set-up to increase security of digital transactions.

To give a major push to Aadhaar-based transactions, the government announced that one million biometric PoS machines will be installed by March and subsequently scaled to two million by September. The budget suggested additional cashless initiatives such as Aadhaar-based smart cards for senior citizens.

It also announced two new schemes—Referral Bonus Scheme for individuals and a Cashback Scheme for merchants—to promote the usage of the Bharat Interface for Money (BHIM) app aimed at encouraging merchants and individuals to use the app and make more digital payments.

The government estimates that around 25 billion digital transactions will take place in 2017-18 via different modes of payments such as the Unified Payments Interface (UPI), immediate payment service, AEPS and debit cards used on PoS terminals.

Railways will no longer levy service charge on train tickets booked online through the IRCTC website. Earlier, a service tax of Rs20 had to be paid while booking sleeper class tickets and Rs40 for AC class tickets.

Source : Live Mint

No additional levy on use of cards at petrol stations says Petroleum Minister

MoS (I/C) for Petroleum and Natural Gas, Shri Dharmendra Pradhan said neither the customers nor petrol pump dealers will bear additional charges on digital transactions at petrol stations. He said that the Government had issued guidelines in February 2016 stating that the Merchant Discount Rate (MDR) charge will not be passed on to the consumers and that the stakeholders will take appropriate steps to absorb the MDR charges.

The Government has stepped in after the issue on levy on digital transaction at petrol stations was raised by association of petrol pump dealers. Shri Pradhan said that there will be no additional levy on digital transaction at petrol stations even after 13 January, 2017. He also said that the Petrol pump transaction fee is a business model between the banks & oil marketing companies which they will resolve.

Source : PIB

LPG customers to now get a discount for on-line payment of LPG refill

Oil Marketing Companies, viz IndianOil, BPCL & HPCL are now offering an upfront discount of Rs 5/- on every LPG refill to all LPG customers who will book and pay for their LPG cylinders online. Customers can make payment through existing online modes i.e net banking, credit & debit cards at the time of web-booking their refills.

Customers will get the discounted amount displayed on their screens – i.e. net amount i.e refill RSP minus (-) incentive amount of Rs.5/- which they need to pay for their refill transactions. The net discounted amount will also be shown on the cash memo accompanying the home-delivery of the LPG cylinder.

Under the aegis of Ministry of Petroleum & Natural Gas, it the endeavour of all Oil Marketing Companies aim to encourage consumers to increasingly shift to such payment modes through digital platforms to achieve the objective of no-cash or less-cash based transactions. The incentive will encourage more and more LPG consumers to go for cashless mode transactions.

Source : PIB

Government of India kick-starts the awards of the Lucky Grahak Yojana and Digi-Dhan Vyapar Yojana

In order to incentivize Digital Payments, the Government of India, today, kick-started the Lucky Grahak Yojana and Digi-Dhan Vyapar Yojana awards. To make Digital payments and a less cash society a mass movement in India, the DigiDhan Mela will take place in 100 different cities across the country over the next 100 days until March.

A total of 15000 winners were selected under 4 broad categories (USSD, UPI, AEPS, RuPay)from the 8 crore digital transactions that took place between 9th November 2016 to 21st December 2016. NPCI announced the winners of today’s lucky draw will receive a message from their banks and the reward money will be credited into their bank accounts over the next 24 hours. Citizens may check if they have received the reward by logging on to: www.digidhanlucky.mygov.in.

Winners of the Lucky Grahak Yojana and the Digi-Dhan Vyapar Yojana will be selected on a daily and weekly basis respectively, leading up to a mega draw on 14th April 2017, where after the scheme shall be reviewed for further implementation.

The draws for these events will take place in 100 different cities around India, in an event at each of these cities where DigiDhan Mela will also be organised. Presence of various stakeholders of the digital payment ecosystem, like banks, wallets, telecom service providers, other financial service providers, UIDAI at these Digidhan Melas would provide the opportunity to the citizens – both consumers and merchants – to get educated about digital payment options available, the ease of use and also benefit from hand holding provided by the service providers which would encourage wide-scale adoption of digital payments methods. In the long term such a mass movement is expected to shift large sections of the consumer and producer sections which was hitherto in the informal sector to the formal fold of the economy.

Source : PIB

RBI directions to banks regarding charging fees for transactions

In line with the Central Government’s objective of promotion of payments through cards and digital means over payments in cash, the Reserve Bank of India (RBI) has recently rationalized customer charges for transactions up to Rs. 1000/- settled on Immediate Payment Service (IMPS), Unified Payments Interface (UPI) and Unstructured Supplementary Service Data (USSD) with effect from 01.01.2017 till 31.03.2017. RBI has also rationalized the Merchant Discount Rate (MDR) for debit card transactions up to Rs. 2000/- with effect from 01.01.2017 till 31.03.2017.

In order to further promote digital and card payments, the Department of Financial Services (DFS), Ministry of Finance has issued a direction in public interest to all Public Sector Banks(PSBs), in accordance with which these banks shall not charge fees for transactions settled on Immediate Payment Service (IMPS) and Unified Payments Interface (UPI) in excess of rates charged for National Electronic Funds Transfer (NEFT) for transactions above Rs. 1000/-, with service tax being charged at actuals. For Unstructured Supplementary Service Data (USSD) transactions above Rs. 1000/-, a further discount of fifty paise on these rates shall apply.

This direction shall apply for all transactions up to 31.03.2017.

Source : PIB

Measures for Promoting Digital Payments & Creation of Less-Cash Economy: Benefit of lower rate of Income Tax on digital turnover for small businesses.

The benefit of lower rate of Income-tax on digital turnover for small businesses up to a turnover of Rs.2,00,000,00 (Rupees Two Crore), announced by the Government yesterday under Section 44AD of the Income-tax Act, 1961 is a huge benefit given to businessmen for promoting digital/banking transactions. The benefits given are explained in the following paragraph.

If a trader makes his transactions in cash on a turnover of Rs.Two Crore, then his income under the presumptive scheme will then be presumed to be Rs. 16 lakhs @ 8% of turnover.  After availing of Rs. 1.5 lakhs of deduction under Section 80C, his total tax liability will be Rs. 2,67,800/-. However, if he shifts to 100% digital transactions under the new announcement made, his profit will be presumed to be at Rs. 12 lakhs @ 6% of turnover, and after availing of Rs. 1.5 lakhs under Section 80C,  his tax liability now will be only Rs.1,44,200/. Here, digital transaction includes payment received by Cheque or through any other digital means. In the following example, the benefit obtained by traders and small businesses is explained in 3 different scenarios:

Particulars

100% Cash Turnover (Rs.)

60% Digital Turnover (Rs.)

100% Digital Turnover (Rs.)

Total Turnover

2 Crore

2 Core

2 Crore

Cash Turnover

2 Crore

0.80 Crore

NIL

Digital Turnover

NIL

1.2 Crore

2 Crore

Profit on Cash Turnover @ 8%

16 Lakh

6.40 Lakh

NIL

Profit on Digital turnover @ 6%

NIL

7.20 Lakh

12 Lakh

Total Profit

16 Lakh

13.60 Lakh

12 Lakh

Deduction u/s 80C

1.5 Lakh

1.5 Lakh

1.5 Lakh

Taxable Income

14.50 Lakh

12.10 Lakh

10.50 Lakh

Tax Payable

2,67,800

1,93,640

1,44,200

Tax Saving

NIL

74,160

1,23,600

 

 

Apart from making a tax saving of almost 46% by migrating to banking mode, the small businesses would be able to build their books which may also help them get bank loans easily.  Also, if transactions are carried out through banking channels, then anybody having annual turnover up to Rs. 66 lakhs will have zero tax liability after availing the benefit of Section 80C, after amendment of this new rate structure.

Source : PIB

Government decides to reduce the existing rate of deemed profit under section 44AD of the Income Tax Act in respect of amounts/receipts through banking channel/digital means

Under the existing provisions of section 44AD of the Income-tax Act, 1961 (the Act), in case of certain assesses (i.e. an individual, HUF or a partnership firm other than LLP) carrying on any business (other than transportation, agency, brokerage and commission) and having a turnover of Rupees Two Crore or less, the profit is deemed to be 8% of the total turnover.

In order to achieve the Government’s mission of moving towards a less cash economy and to incentivise small traders / businesses to proactively accept payments by digital means, it has been decided to reduce the existing rate of deemed profit of 8% under section 44AD of the Act to 6% in respect of the amount of total turnover or gross receipts received through banking channel / digital means for the financial year 2016-17. However, the existing rate of deemed profit of 8% referred to in section 44AD of the Act, shall continue to apply in respect of total turnover or gross receipts received in cash.

Legislative amendment in this regard shall be carried out through the Finance Bill, 2017.

Source : PIB

DigiShala DD channel launched to promote digital payments

DigiShala, a free Doordarshan DTH channel has been launched to educate and inform the people about the various modes of digital payments. The channel will help people understand the use of unified payments interface (UPI), USSD, aadhaar-enabled payments system, electronic wallets, debit and credit cards.

Door Darshan (DD) Free Dish reaches to around 2 to 2.5 crore families, mostly in rural areas and people from poor background. The DigiShala is an education and non-commercial TV channel on DD Free Dish with aim to:

  • Impart education related to the digital payment ecosystem, its tools, benefits and processes
  • Inform and educate citizens about Digital India - cashless, faceless and paperless
  • Encourage citizens especially in rural and semi urban areas to use digital payments as well as other products and services offered by Digital India

DigiShala Subscription Details

  • Free to Air (FTA) Channel with receiving frequency: 11590 MHz
  • Satellite/Location: GSAT 15 (DD Direct DTH), 93.5 degree East
  • Broadcasted nationally on DD Free Dish DTH service
  • affordable service without any subscription fees
  • DigiShala TV Channel is also available on channel no 2032 on Dish TV (of Zee Group)

DigiShala Programme Portolio

Range of educational programmes on Digital India in multiple regional languages Sessions with focus on:

  • Step by step demos of making digital payments using UPI, USSD, Aadhaar, e-Wallets, cards etc
  • Talk shows and panel discussions with experts
  • Case studies on business transformation using digital payments
  • Information about products and services under the Digital India programme

To view the Programme Schedule of DigiShala TV Channel, click here.

Source : Cashless India website

NITI Aayog announces launch of schemes for incentivising digital payment

NITI Aayog announces the launch of the schemes Lucky Grahak Yojana and the Digi-धन Vyapar Yojana to give cash awards to consumers and merchants who utilize digital payment instruments for personal consumption expenditures. The scheme specially focuses on bringing the poor, lower middle class and small businesses into the digital payment fold. It has been decided that National Payment Corporation of India (NPCI) shall be the implementing agency for this scheme.

The primary aim of these schemes is to incentivize digital transactions so that electronic payments are adopted by all sections of the society, especially the poor and the middle class. It has been designed keeping in mind all sections of the society and their usage patterns. For instance, the poorest of poor will be eligible for rewards by using USSD. People in village and rural areas can participate in this scheme through AEPS. The scheme will become operational with the first draw on 25th December, 2016 (as a Christmas gift to the nation) leading up to a Mega Draw on Babasaheb Ambedkar Jayanti on 14th April 2017. It will comprise of two major components, one for the Consumers and the other for the Merchants:

a) Lucky Grahak Yojana (Consumers) :

  • Daily reward of Rs 1000 to be given to 15,000 lucky Consumers for a period of 100 days;
  • Weekly prizes worth Rs 1 lakh, Rs 10,000 and Rs. 5000 for Consumers who use the alternate modes of digital Payments

This will include all forms of transactions viz. UPI, USSD, AEPS and RuPay Cards but will for the time being exclude transactions through Private Credit Cards and Digital Wallets.

b) Digi-धन Vyapar Yojana (Merchants) :

  • Prizes for Merchants for all digital transactions conducted at Merchant establishments
  • Weekly prizes worth Rs. 50,000, Rs 5,000 and Rs. 2,500

c) Mega Draw on 14th of April – Ambedkar Jayanti

  • 3 Mega Prizes for consumers worth Rs 1 cr, 50 lakh, 25 lakh for digital transactions between 8th November, 2016 to 13th April, 2017 to be announced on 14th April, 2017
  • 3 Mega Prizes for merchants worth Rs 50 lakhs, 25 lakh, 12 lakh for digital transactions between 8th November, 2016 to 13th April, 2017 to be announced on 14th

To ensure that the focus of the scheme is on small transactions (entered into by common people), incentives shall be restricted to transactions within the range of Rs 50 and Rs 3000. All transactions between consumers and merchants; consumers and government agencies and all AEPS transactions will be considered for the incentive scheme.

The winners shall be identified through a random draw of the eligible Transaction IDs [which are generated automatically as soon as the transaction is completed] by software to be especially developed by NPCI for this purpose. NPCI has been directed to ensure a technical and security audit of the same to ensure that the technical integrity of the process is maintained.

The estimated expenditure on the first phase of the scheme (up to 14th April 2017) is likely to be 340 Crores. The Government will simultaneously carry out a review for further implementation.

Source : PIB

Digi Dhan Abhiyan

Digi Dhan Abhiyan is a Ministry of Electronics and IT (MeitY) campaign to promote cashless transactions. The campaign aims to enable every citizen, small trader and merchant to promote digital payment in their every day financial transactions.

As part of the campaign, workshops and awareness drives are to be organised across the country to promote cashless transaction.

Vittiya Saksharta Abhiyan (VISAKA) of MHRD

The `Vittiya Saksharta Abhiyan’, an initiative of the Ministry of Human Resource Development, aims to actively engage the youth/ students of Higher Education Institutions to encourage and motivate all payers and payees to use a digitally enabled cashless economic system for transfer of funds.

Through the VISAKA web portal, students and teachers of higher institutions can register as volunteers and upload their achievements periodically. Major achievement will be acknowledged and commended.

Source : VISAKA portal

Package for Promotion of Digital and Cashless Economy

In the aftermath of the cancellation of the legal tender character of old Rs.500 and Rs.1,000 notes, there has been a surge in the digital transactions through use of credit/debit cards and mobile phone applications/e-wallets etc. To further accelerate this process, the Central Government has decided on a package of incentives and measures for promotion of digital and cashless economy in the country. These incentives/measures are following:

  1. The Central Government Petroleum PSUs shall give incentive by offering a discount at the rate of 0.75% of the sale price to consumers on purchase of petrol/diesel if payment is made through digital means. Nearly 4.5 crore customers buy petrol or diesel at such petrol pumps per day who can take benefit of this incentive scheme. It is estimated that petrol/diesel worth Rs.1800 crore is sold per day to the customers out of which nearly 20% was being paid through digital means. In the month of November 2016 it has increased to 40% and the cash transaction of Rs.360 crore per day have got shifted to cashless transaction methods. The incentive scheme has the potential of shifting at least 30% more customer to digital means which will further reduce the cash requirement of nearly Rs. 2 lakh crore per year at the petrol pumps.
  2. To expand digital payment infrastructure in rural areas, the Central Government through NABARD will extend financial support to eligible banks for deployment of 2 POS devices each in 1 Lakh villages with population of less than 10,000. These POS machines are intended to be deployed at primary cooperative societies/milk societies/agricultural input dealers to facilitate agri-related transactions through digital means. This will benefit farmers of one lakh village covering a total population of nearly 75 crore who will have facility to transact cashlessly in their villages for their agri needs.
  3. The Central Government through NABARD will also support Rural Regional Banks and Cooperative Banks to issue “Rupay Kisan Cards” to 4.32 crore Kisan Credit Card holders to enable them to make digital transactions at POS machines/Micro ATMs/ATMs.
  4. Railway through its sub urban railway network shall provide incentive by way of discount upto 0.5% to customers for monthly or seasonal tickets from January 1, 2017, if payment is made through digital means. Nearly 80 lakh passengers use seasonal or monthly ticket on suburban railways, largely in cash, spending worth nearly Rs.2,000 crore per year. As more and more passengers will shift to digital means the cash requirement may get reduced by Rs.1,000 crore per year in near future.
  5. All railway passengers buying online ticket shall be given free accidental insurance cover of upto Rs. 10 lakh. Nearly 14 lakh railway passengers are buying tickets everyday out of which 58% tickets are bought online through digital means. It is expected that another 20% passengers may shift to digital payment methods of buying railway tickets. Hence nearly 11 lakh passengers per day will be covered under the accidental insurance scheme.
  6. For paid services e.g. catering, accommodation, retiring rooms etc. being offered by railways through its affiliated entities/corporations to the passengers, it will provide a discount of 5% for payment of these services through digital means. All the passengers travelling on railways availing these services may avail the benefit.
  7. Public sector insurance companies will provide incentive, by way of discount or credit, upto 10% of the premium in general insurance policies and 8% in new life policies of Life Insurance Corporation sold through the customer portals, in case payment is made through digital means.
  8. The Central Government Departments and Central Public Sector Undertakings will ensure that transactions fee/MDR charges associated with payment through digital means shall not be passed on to the consumers and all such expenses shall be borne by them. State Governments are being advised that the State Governments and its organizations should also consider to absorb the transaction fee/MDR charges related to digital payment to them and consumer should not be asked to bear it.
  9. Public sector banks are advised that merchant should not be required to pay more than Rs. 100 per month as monthly rental for PoS terminals/Micro ATMs/mobile POS from the merchants to bring small merchant on board the digital payment eco system. Nearly 6.5 lakh machines by Public Sector Banks have been issued to merchants who will be benefitted by the lower rentals and promote digital transactions. With lower rentals, more merchants will install such machines and promote digital transactions.
  10. No service tax will be charged on digital transaction charges/MDR for transactions upto Rs.2000 per transaction.
  11. For the payment of toll at Toll Plazas on National Highways using RFID card/Fast Tags, a discount of 10% will be available to users in the year 2016-17.

Source : PIB

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