Taking
a leaf from other countries strategies to boost CashLess
transactions, Shri Jaitley said the following while presenting the
Indian Union Budget 2015.
“One
way to curb the flow of black money is to discourage transactions in
cash. Now that a majority of Indians has or can have, a RuPay debit
card, I, therefore, propose to introduce soon several measures that
will incentivise credit or debit card transactions, and
disincentivise cash transactions.”
Briefly
the following are a few examples on nation's journey in the CashLess
path.
Thailand:
During the last quarter of 2012, the apex bank of Thailand observerd
that the number of transactions through debit cards was on the
increase. On a detialed analysis, it was observed that the majority
of the transactions were for cash withdrawal and not for goods and
service purchases.
To
shift the transactions from cash mode to goods/services purchases ,
Bank of Thailand embarked on a major publicity drive. This strategy
has paid off and slowly but steadily the share of good/services
purchases via Debit/Prepaid Cards is on the increase.
Korea:
Korea adopted a different strategy to boost goods/services purchases
through eTransaction modes especially credit/debit/prepaid cards. The
strategy has been so successful that it is referred to most nations
who want to reap the benefits of CashLess transactions.
To
reduce the chances of credit card traps i.e over purchasing/impulsive
buys, Korean government reduced tax deductions on credit card
transactions and increased tax deductions for debit and prepaid
cards.
CashLess
in Korea account for 70% of the value of all consumer payments.
Korea's journey to the CashLess society begun 20 years ago.
United
States of America: In USA, the Internal Revenue Service (IRS) has
specific tax rules to encourage payment of taxes electronically,
especially credit cards.
These
rules are applicable to both individuals and businesses. For example,
one can deduct credit and debit card fees incurred if you paid your
individual federal income taxes electronically. Another deduction is
available if a credit card company imposes fees on a business for the
service of processing charged sales. If there is business credit
card, there are qualifications for deductions based on annual fees and
late fees charged by your provider.
The
deductions were necessary as the credit/debit card issuance
institutions or aggregators charge for the services provided. The
Internal Revenue Service, or IRS, offers electronic payment systems
for tax purposes, but other federal laws prohibit the IRS from
directly paying any of the fees associated with debit or credit
transactions. The IRS created a deduction in 2009 to offset the fee
assessed by your credit card company when you make electronic tax
payments. T
