With the Cabinet giving its approval for introduction of steps to promote payments through cards and the digital channel, there could be greater adoption of the online platform for making utility payments, travel and e-commerce, say industry experts.

The essential features include steps for withdrawal of surcharge/service charge/ convenience fee on card/ digital payments by various government departments/organisations; and rationalisation of merchant discount rate (rate charged by banks to provide debit/credit card services to merchants) on card transactions.

AP Hota, MD and CEO, National Payments Corporation of India, said: “The Cabinet decision on a package of measures to promote card and digital payment is a great step forward.

“While measures like no surcharge/service charge for card/digital payments address the concerns of bank customers and card-issuing banks, the plan to expand the acceptance infrastructure for card would give a significant fillip to e-payments.”

The government’s plan for rationalisation of service charges will facilitate mobile banking services based on the short-code ‘*99#’ to all, he added.

‘*99#’ is a service which would take banking services to every man in this country. The service would allow every banking customer to access banking services with a single number across all banks — irrespective of the telecom service provider, mobile handset model or region.

Deepak Sharma, Executive Vice-President & Head – Digital Initiatives of Kotak Mahindra Bank, said the government’s move is customer-friendly as it removes the surcharge, especially for utility payments. Sharma explained that currently when a customer buys a railway ticket from IRCTC or pays insurance premium online, a separate surcharge or convenience fee of ₹10-15 is levied. Now this surcharge will go away.

“We see this as a right incentive for customers to use online channel, debit and credit cards. This will reduce cash transactions in the economy,” said Sharma.

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