DNA Money Edit: Digital payments policy can spur cashless economy

The government's battle against black money is sustainable only if it promotes digital transactions. As banks levy a fee for online transactions, people will prefer to deal in hard cash. Despite the finance ministry's promises, incentives for online transactions are yet to be formalised. Against this backdrop, the move by the Confederation of All India Traders (CAIT) to call for a digital payments policy assumes importance.

Apart from suggesting measures such as tax benefits to consumers and merchants, CAIT has prepared a report on universal access to infrastructure and open payment systems under a digital payments policy. According to traders, the government needs to set up a regulatory authority for digital payment systems, if it aims to achieve its stated target of Rs 2,500 crore in online transactions by March 2018. CAIT has also suggested implementation of a reward scheme for merchants and consumers, faster adoption of mobile QR Code-based card acceptance solutions, formation of digital payments board and an authority to monitor RuPay.

Incentives to promote cashless transactions are inevitable in a country that runs on cash. The surgical move in November last year to invalidate high-value currency notes was the first step towards weeding out cash hoarders across the country and cleaning up India's economy. The government subsequently capped cash transactions at Rs 3 lakh, but it has not done enough to promote cashless transactions. It should be able to provide an access and infrastructure for everyone to do business online based on the customer's preferred method of payment from across a choice of digital payment providers. That should be the way forward.