CMs Committee on Digital Payments

• The CMs Committee on Digital Payments led by the convener and Andhra Pradesh Chief Minister, Shri Chandra Babu Naidu has submitted the interim report on Digital Payments to the Prime Minister.

Important recommendations:

• Ban on cash transactions beyond a threshold and a tax on payments beyond Rs 50,000.
• A subsidy of up to Rs 1,000 for smartphones purchased by those who do not pay income tax as well as small merchants in addition to lowering or doing away with the merchant discount rate or the fee paid on card and online transactions.
• There is a need to strengthen security, expand infrastructure and increase awareness for greater adoption of digital payments.
• Proposed tax sops for domestic production of micro ATMs and biometric sensors, along with a subsidy of 50% to merchant points using Aadhaar Pay, which will use fingerprint or iris scan.
• All 1.5 lakh post offices should have infrastructure to deal with Aadhaar-enabled micro ATMs and there should be inter-operability for banking correspondent via Aadhaar-enabled payment system.
• Relief in prospective taxes for encouraging merchants to accept digital payments & no retrospective taxation to Merchants doing digital transactions.
• Tax incentives to be extended to Micro ATMs, Biometric Sensors etc. Domestic production to be encouraged.
• Tax refund for consumers using digital payment upto a certain proportion of annual income.
• AEPS( Aadhaar Enabled Payment System) to be promoted by incentivising & not charging MDR.
• Create fund from savings generated through cash-less transactions for incentivising acquiring bank acceptance infrastructure creation in semi-urban and rural areas.
• Contactless payments to be promoted for travelling in buses & suburban trains in metro cities.
• UPI App should contain a common interoperable UPI QR Code.
• Banks to encourage the common QR Code at merchant location.
• Rural and Urban Cooperative Banks should be on boarded to Digital Transactions mode immediately.
• Aadhaar to be made primary ID for KYC.
• Section 57 of Aadhaar Act can be applied.
• All government sections like insurance, educational institutes, fertilisers, PDS, Petroleum etc to switch to digital payments
• Lower / Zero MDR for all digital payments to Government entities

By: Vishal