Today’s Post
is with reference to the White Paper presented to Indian Parliament
by Finance Minister, Mr.Pranab Mukherjee.
This report has
been prepared by Ministry of Finance, Department of Revenue-Central
Board of Direct Taxes.
To Safe
ePayments professionals, the Black Money-White Paper holds lot of
promise. Some suggestions in the White Paper have the potential to
boost the ePayments volumes.
The following
are noteworthy from the epayments angle.
QUOTE
Para No 5.2.27-
Page No 55
Another
important measure in this regard could be the promotion of banking
channels including use of credit and debit cards, since they leave
adequate audit trails and hence disincentivise black money
generation.
The opposite is
true of trade practices that block the audit trail, such as cheque
discounting, which can be discouraged applying the same logic. With
electronic transfer facilities being available to trade, one can
foresee this as one of the major thrusts towards strengthening
accountability and discouraging unaccounted activities.
Towards this end,
some important initiatives have already being taken which include the
reduction of the validity period of cheques and demand drafts from
six to three months with effect from 1April 2012, which will
discourage discounting of negotiable instruments.
Payments by
debit and credit cards through Indian e-service intermediaries like
'RuPay'2 can further bring down the costs of using such cards,
improve their acceptability, and thereby encourage payments in these
modes and reduce the cash economy.
It is imperative
that payment of wages and salaries in the private sector should also
be through banking channels and should become cashless, in line with
the government objective of financial inclusion.
Government can
also deliberate providing tax incentives for use of credit/debit
cards as practiced in Republic of Korea.
Provisions for
collection of tax at source at a low level on cash purchases may also
be considered as a possible policy option.
UNQUOTE
Once Rupay is up
and running, the transaction cost to all the participants will reduce
drastically. As of now, in small/medium shops 2% excess is charged,
if the customer desires to pay via Credit/Debit Card. Hence,
customers do no tend to opt for the Credit/Debit card payment option.
Plus industry
wide push is not still not very much visible. Continuous campaigns to
educate the customers the benefits of Credit/Debit Cards will aid in
increasing the volumes.
In the recent
past, State Bank of India was running a TV Campaign and AXIS a
Print/TV Campaign. Visa/Mastercard too run campaigns.
However, ways
should be found out, to reduce the Credit/Debit fraudulent
transactions. Otherwise, with the increase in the volumes, the
fraudulent transactions too will increase.
