The setting up of a payments regulatory board within the Reserve Bank of India (RBI) and amending the Payments and Settlements Act, 2007 is the most significant development for digital payments in the budget presented by finance minister Arun Jaitley.
“There will be an amendment in law, and a new payments regulatory board will be constituted, replacing the existing one,” Jaitley said in his speech. This was in line with the recommendations of the Watal Committee report on digital payments which was presented in December.
However, the need of the hour, with the influx of digital payments being made through various means such as wallets, cards, UPI, NEFT and IMPS is to develop a grievance handling system. During the budget, the finance minister had set a target of 2,500 crore cashless transactions in 2017-18 primarily through the Unified Payments Interface (UPI) and Aadhaar Pay. As MediaNama had reported, many transactions on the UPI are failing and customers are not able to get refunds and around the same time, transactions worth Rs 990 crore were happening on the UPI.
– BHIM app: The finance minister also seems to have taken a leaf out of Paytm’s and other payment companies playbook said that the BHIM app will get two new schemes for individuals and merchants. Individual users, they will be eligible for a bonus while merchants will be able to give cash backs for using the app. Arun Jaitley also said that BHIM app has 1.25 crore users until now.
– Aadhaar Pay: Jaitley also made a mention of the Aadhaar Pay which will allow any person with his Aadhaar number linked to Bank account, can make and/ or receive payment, with a thumb impression alone.
– POS and micro ATMs: The finance minister reiterated the goal of setting up 10 lakh POS terminals in the country which was mentioned during the demonetization period. At the same time, he added that 20 lakh Micro-ATMs which can process Aadhaar payments would be set up in the country. The minister also relaxed custom and excise duty for firms engaged in the manufacturing of digital devices such as micro ATMS, POS/ mPOS. MediaNama has been mentioning India has one of the lowest POS terminal penetration. There are 700 million debit cards and 25.94 million credit cards and there are only 14,43,899 POS terminals in the country.