The government wants to offer an annual budgetary assistance of Rs 2,500 crore to assistance cashless payments by way of BHIM-UPI as it would outcome in substantial savings on handling of money, mentioned a report ready by IIT-Bombay.
Observing that shoppers have to usually spend comfort charge on payments produced by way of digital mode, the report mentioned, “RBI should refrain from creating an environment where, for pull payments initiated by merchants (effected by acquirer banks/payment aggregators (PAs) on behalf of merchants), the acquirer banks/PAs charge the consumers.” It mentioned that the practice of IRCTC to provide explicit discounts for accepting payments by way of BHIM-UPI wants to be emulated by prominent e-commerce merchants Amazon, Flipkart, Zomato, Swiggy, Airtel and Makemytrip.
“This would boost BHIM-UPI volumes”, the report added.
The report, ready by Department of Mathematics, Indian Institute of Technology – Bombay, recommended that “a budgetary support to the tune of Rs 2,500 crore annually would on the one hand support BHIM-UPI and on the other render substantial savings on handling cash.” Being a uncomplicated and effective smartphone-primarily based suggests of payment, Indians have taken to BHIM-UPI like fish to water, it mentioned, adding that other modes of digital payments stand no competitors to BHIM-UPI.
There have been more than Rs 221 crore BHIM-UPI transactions in November 2020 alone.
As BHIM-UPI gets additional fillip, in order to preserve its overall performance in terms of robustness and efficiency, banks and program providers will have to invest extra towards upgrading their infrastructure and safety, bring about item innovations (R&D) and additional awareness amongst the persons of India.
Expenditures to create and market asset-lite BHIM-UPI, an apposite digital option to money, should really be borne by the government and RBI, it mentioned.
“The letter and spirit behind the RBI regulation prohibiting MDR charges being passed, directly or indirectly, onto the customers, should guide RBI to protect the end consumers for debit card transactions done at IRCTC.
“RBI wants to assess why Kotak Mahindra Bank and ICICI Bank want not refund the unduly charged amounts for debit card transactions acquired by them at IRCTC?,” it mentioned.
Given the extant chaos that persists in the payment systems policy formulation, in the interest of the country’s payment systems, it may well be proper for the government to reconsider the ‘Payment and Settlement Systems Bill, 2018’ that proposes consolidation and amendment of the law relating to payments.