Recent Policy Measures for Promoting Digital Payments

Recent Policy Measures for Promoting Digital Payments: In the aftermath of the cancellation of the legal tender character of old Rs. 500 and Rs. 1000 notes, there has been a surge in digital transactions through use of credit/debit cards and mobile phone applications/e-wallets etc. To further accelerate this process, the Central Government announced, on December 8, 2016, the package of incentives and measures for promotion of digital and cashless economy in the country as reproduced below:

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.

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 in each of 1 lakh villages with population of less than 10,00o. These POS machines are intended to be deployed at primary cooperative societies / milk societies / agricultural input dealers to facilitate agriculture related transactions through digital means.

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.

Railway, through its sub urban railway network, shall provide incentive by way of discount up to 0.5% to customers for monthly or seasonal tickets from January 1, 2017, if payment is made through digital means.

All railway passengers, buying online ticket, shall be given free accidental insurance cover of up to Rs. 10 lakh.

For paid services e.g catering, accommodation, retiring rooms etc. being offered through its affiliated entities/corporations to the passengers, the Railway will provide a discount of 5% for payment of these services through digital means.

Public sector insurance companies will provide incentive, by way of discount or credit, up to 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.

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 organisations should also consider absorbing the Transaction Fee / MDR Charges related to digital payment and consumer should not be asked to bear it.

No service tax will be charged on digital transaction charges/MDR for transactions up to Rs. 2000 per transaction.

For the payment of toll at Toll Plazas on National Highways using radio-frequency identification technology (RFID) card / Fast Tags, a discount of 10% will be available to users in the year 2016-17. NITI Aayog announced, on December 15, 2016, the schemes Lucky Grahak Yojana and Digi-Dhan Vyapar Yojana to give cash rewards to consumers and merchants who utilise digital payment instruments for personal consumption expenditures. The scheme became operational with the first draw on 25th December, 2016 and ended with a Mega Draw on 14th April 2017. The scheme was focused on small transactions (entered into by common people) within the range of Rs. 3000. The reward system was as below;

(a) Lucky Grahak Yojana [Consumers]: (1) Daily reward of Rs. 1000 to 15,000 lucky consumers for a period of 100 days; (ii) Weekly prizes worth Rs. 1 lakh, Rs. 10,000 and Rs. 5,000 to consumers who used the alternate modes ot digital payments such as UPI, USSD, Aadhaar Enabled Payment Systern (AEPS) and RuPay Cards.

(b) Digi-Dhan Vyapar Yojana [Merchants]: (1) Prizes for Merchants for all digital transactions conducted at merchant establishments; (i) Weekly prizes worth Rs. 50,000, Ra 50,000 and Rs. 2500.

Mega Draw on 14th of April: (i) 3 Mega Prizes for consumers worth Rs. 1 crore, 50 lakh, 25 lakh for digital transactions between 8th November, 2016 to 13th April, 2017; ) 3k Prizes for merchants worth Rs. 50 lakh, 25 lakh and 12 lakh for digital transactions between November, 2016 to April, 2017

Sample Questions

(More Questions for each concept available in Login)

Question : 1

AEPS stands for which of the following?
A. Automated engineered payment service	B. Aadhaar-enabled promotion scheme	C. Aadhaar-enabled Payment system	D. Aadhaarenabled Payment scheme
Right Option : D
View Explanation