The Reserve Bank of India (RBI) announced some measures to push the online transactions in India. It includes the removal of charges on Online fun transfer system National Electronic Funds Transfer (NEFT), introducing interoperable system such that FASTags, which you can use to pay the fuel, parking or any other kind of fees.
The Reserve Bank of India, made it madatory for the banks to not charge on the NEFT transactions on savings bank accounts. This measure has been taken to make the transactions cheap for the customers.
These measures have been announced exactly three years after the announcement of demonetization by National Democratic Alliance (NDA) government. It was on 8th Noveber 2016, when demonetization was announced to fight with black money, counterfeit currency, terror financing.
Even though cash transactions continue to dominate, demonetization, government took many steps to promote digitalization and the Reserve bank of India has nurtured the habit of people spending through various digital platforms.
RBI also proposed setting up of acceptance development fund to increase, towards setting up of payment infrastructure with effect from 1 January, 2020.
RBI also suggested to permit all authorized payment systems and instruments as wallets, cards and instant payments system UPI to link FASTags– an electronic toll connection device fixed on the windshield of a vehicle to enable drivers to zip through toll plazas without having to stop. This step will help in facilitating the use of FASTags to pay for parking and fuel, making the system interoperable.
“Enable processing of e-mandates for transactions through UPI. Constitute a committee to assess the need for a plurality of QR (quick response) codes and merits of their co-existence or convergence from both systemic and consumer viewpoints,” RBI said. While the details are awaited as per experts, this might enable common QR code through integration of various payment options.
“RBI has offered incentives which would increase both the breadth by getting new players in tolls and transit space as well depth of the ecosystem by enabling new use cases like e-mandates. The initiatives are in the regulatory continuum to drive interoperability and adoption” Vivek Belgavi, Partner at PwC India said.
According to RBI, between October 2018 and September 2019, 96% of the digital payments were of total non-cash retail payments. During the same period, the NEFT and instant payments system Unified Payments Interface (UPI) clocked 252 crore and 874 crore transactions, with year-on-year growth of 20% and 263%, respectively.
These measures to remove the transaction fees from digital payments is a big step by RBI, and it would definitely promote online transactions.