Payment gateway Citrus Pay has waived off charges for its services for all government institutions for a period of 18 months. The move follows the government’s removed surcharge and service tax on digital payments in February.

Citrus Pay will start a special program to waive any charges for its payment gateway platform, and only direct bank interchange fees will be applicable. The company says that government merchant payments have been increasing at 70% year-on-year, and that with this program it expects to double the volume of business.

Indian government bodies’ services and products are either a controlled commodity or the prices are fixed, the government institutions find it difficult to absorb the fees associated to electronic payments. These fees are passed on to the consumer in forms of surcharge or convenience fees.

The Economic Times pointed out that government bodies will stand to lose 2% transaction charges and could impact the revenues of government companies like IRCTC.

Citrus works with government merchants such as IRCTC, Delhi Metro, Delhi Jal Board and multiple state municipal bodies, among others.

Department of economic affairs suggestions

Last month, the department of economic affairs (DEA)  had proposed a number of suggestions to boost the adoption of digital payments. The DEA issued a number of short and medium term recommendations which includes use of existing open-loop systems issued by a bank for making transit payments and relax Two Factor Authentication norms for both card present and card not present transactions below a certain specified amount.

Recent developments at Citrus

– In December 2015, Citrus Payment Solutions hived off its mobile app Cube as a separate entity with co-founder Satyen Kothari at the helm.

– In October 2015, Citrus acquired Bangalore-based payments company Zwitch for an undiscloded amount. Following the deal, founders Anish Achutan and Mabel Chacko will be joining Citrus Pay along with the core members of Zwitch.

– In the same month, the company raised Series C funding led by Ascent Capital and existing investor, Sequoia Capital, with participation from other existing investors, Beenos and eContext Asia.