Intent on turning the economy cashless, the Centre is hoping to popularise the Unique Identification Number or other such identity proof for digital transactions.
The Finance Ministry has now entrusted a high-level committee to examine this proposal and suggest ways to encourage digital payments.
“This is the next step on how to provide a full ecosystem for cashless transactions,” said an official.
The committee, led by former Finance Secretary Ratan Watal, has also been asked to examine the feasibility of creating a payment history of all card and digital payments to enable merchants and consumers to leverage their credit history and get instant, low-cost micro-credit.
“It would also study and recommend measures to incentivise transactions through cards and digital means through tax rebates and incentives, introduction of cashback and lottery,” the Finance Ministry said in an order. The panel has been asked to submit its report within a year.
This is the latest in a series of efforts by the Centre and the Reserve Bank to migrate from a cash-based economy to electronic payments, a move that will not only reduce the cost of transactions but also tackle the problem of black money.
In February, the Union Cabinet had decided to promote cashless payments through measures such as removing surcharges on card-based payments.
The country is also gearing up for the Unified Payments Interface (UPI), which will allow bank account holders to collect and send money through their smartphones.
The Finance Ministry has also asked the committee to study the introduction of a single-window payment gateway that would accept all types of card and digital payments of government receipts, and also the feasibility of a setting up a centralised KYC Registry.
It has also been asked to recommend any amendments to the regulatory mechanism under various legislations, including the Payments and Settlement System, the RBI Act, Banking Regulation Act, Information Technology Act, Telecom Regulatory Authority Act and the Prevention of Money Laundering Act.