Government announces sops to promote digital payments

NEW DELHI: Admitting that there are visible and hidden costs in reducing cash volume in the economy, the government on Thursday announced a series of eleven measures designed to increase the pace of digital payments to usher in a cashless economy.

Among the measures, payment by card for petrol and diesel will enjoy a discount of 0.75 per cent, Finance Minister Arun Jaitley ( pictured) told reporters here.

He said that in one month since the demonetisation of high value currency on November 8, the percentage of digital payments at petrol vends has gone up from 20 per cent to 40 per cent.

Customers will get a higher discount on digital payment as all central undertakings will ensure that the transaction fee and merchant discount rate (MDR) charges are waived on such payments, Jaitley said.

Suburban railway monthly and season tickets bought through digital payment will get a 0.5 per cent discount, effective from January 1, 2017, beginning with the Mumbai suburban railway network. “Nearly 80 lakh passengers use seasonal or monthly ticket on suburban railways, largely in cash, spending nearly Rs 2,000 crore per year,” the minister said.

“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.”

The Finance Minister also announced a free accident insurance cover for passengers who buy railway tickets online. “All passengers who buy ticket online will get free insurance cover worth Rs 10 lakh,” Jaitley said.

The minister elaborated that nearly 14 lakh railway passengers buy railway tickets daily — out of which 58 per cent tickets are bought online.

“It is expected that another 20 per cent 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,” he said.

The minister revealed that railways give a discount of five per cent for payment of services like catering, accommodation, retiring rooms through its affiliated entities, corporations to passengers.

Jaitley also announced that online payment for public sector insurance companies (life insurance and general insurance) will get 10 per cent discount for general insurance and 8 per cent discount for life insurance for new policies sold.

The public sector banks are advised to charge only Rs 100 per month as monthly rental from merchants for PoS (point of sale) terminals, micro ATMs, mobile PoS to bring small merchants on board the digital payment eco-system, Jaitley said.