The Union Cabinet has announced the withdrawal of surcharge, service charge and convenience fee on digital payments done through cards or ewallets. Also, beyond a threshold, one has to make payment online or through cards.
The move is made in a bid to motivate people to switch to electronic payments, and avoid cash transactions.
The Cabinet outlined several short (to be implemented within a year) and medium (to be implemented in two years) targets, to be attained by various ministries, towards pushing more electronic payments in the country.
The move comes as a great boost to cashless transactions, and commemorates the Digital India mission.
Talking about the development, Govind Rajan, COO FreeCharge, said, “India is amongst the most cash intensive cash economies in the world. India’s cash to GDP ratio is 12%, which is 3-4 times that of comparable economies like Brazil and South Africa. The cost of managing this high cash dependence is over INR 20,000 Cr in the formal banking system and much more in the entire economy. With this strong signal, we are on our way to wean the country off its expensive and inefficient addiction to cash.”
The new move will provide consumers and merchants a secure and frictionless way of transacting.