In the wake of recently released RBI Data showing digital payments lower by 10.2 per cent in volume and 7 per cent lower by value in January,2017 in comparison to December,2016 as also increasing trend of usage of cash among Merchants & Consumers due to availability of cash, the Confederation of All India Traders (CAIT) has suggested the Government to subsidise transaction charges directly to Banks and absolve either the Merchant or the consumer from the liability of paying such charges. Transaction charges are one of the major deterrent in adoption of digital payments in the Country since neither the merchant and nor the Consumer is willing to pay transaction charges.

The CAIT said that the Country was effectively going on path of digital payments but lack of structured planning, non- inclusion of stakeholders in digital payment initiative and in effective role of National Payments Council of India has brought a break on fore sighted vision of Prime Minister. It suggested the Government to hold Digital Payment Camps in commercial markets across the Country for promotion of adoption of digital payments.Incentives to shopkeepers accepting payments in business transactions through digital payments will encourage traders to embrace e-payment system.

The recent proposal of RBI to subsidise charges on digital payments made for Government revenue is not sufficient. All sorts of digital payments made either for personal expenditure or for business to business or for making payments of Government revenue should be included in the proposal to ensure faster adoption of digital payments in the Country-said Mr. B.C.Bhartia, National President & Mr. Praveen Khandelwal, Secretary General of the CAIT. Both leaders further said that another proposal of RBI prescribing different slabs of transaction charges will make the system more complicated and as such transaction charges as a whole should be subsidised by the Government directly to Banks.

Both Mr. Bhartia & Mr. Khandelwal said that in order to curtail flow of cash, the Government should levy a nominal surcharge on withdrawal of cash from ATM machines. They have also called for a comprehensive incentive policy for the persons and business entities using any mode of digital payments.

The trade leaders also suggested to make a separate body for regulating Rupay Card and the National Payment Council of India should be made an independent regulator to regulate payments market of India. They have further suggested that to intensify digital payments in the Country in a structured way, the Government should form a Digital Payment Promotion Board and representatives of trade & commerce may be included beside officials. The Non-Banking Finance Companies & Micro Finance Institutions should also be brought under the landscape of digital payments to install white label POS terminals by encouraging a scheme to subsidize POS terminals directly or indirectly across both urban and rural areas.

India is predominantly a cash-based economy, with less than 5 per cent of Personal Consumption Expenditure (PCE) of INR 70,000 crore transacted by electronically payments. Those cards are used almost entirely at ATMs rather than at the point of sale (a ratio of 10 cash transactions to 1 at the point of sale). Considering just currency, the ratio of currency to GDP in India (12.2%) is higher than countries such as Russia (11.9%), Brazil (4.1%) and Mexico (5.7%). It is an admitted fact that true value of electro