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Saturday, November 27, 2021

Union Budget 2021: Promotion of digital payment, proposal of Rs 1500 crore scheme

Financial incentives to promote digital payments

Union Budget 2021: The central government on Monday proposed a Rs 1500 crore scheme to promote digital payments in the country. Finance Minister Nirmala Sitharaman said during the budget speech that digital payments have increased manifold in the recent past. Presenting the budget of 2021-22, he said, “To further promote digital transactions, I propose a plan of Rs. 1500 crores, which will give financial incentives to promote digital payments”.

Welcoming the initiative, Vishwas Patel, President, Payments Council of India and Director of Infibeam Avenues Ltd, said that this will give a boost to digital payments. It is expected that this will be used to compensate service providers for losses incurred by the free processing of transactions through RuPay debit cards and UPIs in 2020 and to raise the Rs 500-crore Payment Infrastructure Development Fund (PIDF) created by the Reserve Bank. ”

Digital payments increased by 80% in 2020

The industry has said that the ‘Merchant Discount Rate’ (MDR) in the 2019 budget is going to be adversely impacting the financial technology structure. MDR is the rate that a bank imposes on a shopkeeper or businessman to provide debit and credit card service. Harshil Mathur, CEO and co-founder of Razorpay, said that digital payments have increased by 80 percent in 2020, especially in second and third-tier cities. He said that the government has focused on promoting e-payment to redeem it.

He further said, “It is expected that this fund will be spent on the development of the option of zero MDR policy and efforts towards digital payment in regional languages. This will build confidence in the system and entrepreneurs who have hesitated with digital payments will also be able to come forward to adopt it.

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The focus of investment should be on these things

Shilpa Mankad Ahluwalia, the partner of Sharadul Amarchand Mangaldas & Co., said that this would help in increasing the scope of acceptance of digital payments instead of cash. The focus of investment should be Internet infrastructure, financial and digital literacy initiatives in the second and third-tier cities. “Vijay Mani, the partner at Deloitte India, said such efforts would help expand the scope of digital payments. This is a welcome move.

Nisha Chawlahttps://www.businesskhabar.com/
She is an expert in Banking, Finance and working with an international bank. She sharing her ideas and knowledge with Business Khabar.
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