Digital India gets a push this New Year 2018 under a special gift from Government of India. The gift is that there will not be any additional charges for the UPI transactions up to Rs. 2000 via debit card. The person who is going to do digital payments. This is a good news, it will encourage more person about how to use a debit card while making online payments.
Zero-Charges For Using Debit Card Up to Rs. 2000
With effect from 2nd January, the debit card transaction charges for the amount up to Rs. 2000 will be zero. Other than debit cards, payment using BHIM and transaction with UPI will also be incorporated under this specific arrangement.
The tweet from the Finance Secretary, Rajiv Kumar announced in a very interesting manner –
This development was already in a discussion last month, as the cabinet had approved the decision to engage all types of Merchant Discount Rate (MDR) for the transaction through debit card up to Rs. 2000.
Keeping various estimations in mind, the revenue of government will reach up to Rs. 1050 crore in the financial year 2018-19, which will further increase to Rs. 1462 crore for the year 2019-20.
Withdrawal of such charges over digital transactions will encourage more and more people to use UPI forms as well as debit cards for various digital payment. And promote cashless transaction in everyone’s mind.
Reasons why it has been an Important Decision
Great decisions are always about timing, the worth of right decision is only when it is implemented at the right time.
1) In the latest IDC report which titled “The Future of Payments in India: More Spectacular Growth Ahead” has revealed that the online or cashless payments in India will be equal to the cash payments by the year 2022.
The tremendous growth rate was seen in the report of the digital payment in India’s ecosystem. The rise in the transactions compared to last year is around 62%.
Thus, zero fees on the transaction not more than Rs. 2000 via debit card can help to reach the goal sooner.
2) The international studies have revealed that the digital payments in India have increased and way better compared to UK and China.
FPII (Faster Payment Innovation Index), an innovative scale which has been developed under the research through FIS which is a tech solution provider from America. The report based on this has declared the 5th position of India which is great and no other country has score such a high score.
Digital Payment Will Become Easy Now
Never the less, the total number of digital transactions is still less in India. The total number of digital transactions in China was around $5.5 trillion approx. Whereas the digital transactions in India were $24 billion approx. last year. The expected count till the year 2020 is around $500 billion.
The digital payment will adopt massive transactions via debit card as well as UPI transactions on the removal of such additional charges.
Stay tuned to get more such news related to Digital India.