Centre sets up panel to suggest steps to promote card payments

The Finance Ministry has set up a committee to consider incentives such as cash back schemes and tax rebates for promoting card and digital payments in a step towards discouraging cash transactions.

• The panel, which will review the payments system in the country and recommend measures for encouraging digital payments, has been set up following a decision taken by the Cabinet in February.
• The 11-member committee is headed by former Finance Secretary Ratan P Watal. The committee has been given a year’s time to submit its report.

Tasks to be performed by the committee:

• The committee will recommend various measures to incentivise transactions through cards and digital means, e.g., through tax rebates/incentives, introduction of cash back/lottery.
• It will study feasibility of creating a payments history of all card/digital payments and ensure that merchants/consumers can leverage the data to access “instant, low cost micro-credit” through digital means and create necessary linkage between the payment history and credit information.
• It will study and recommend need for changes, if any, in the regulatory mechanism under various laws, relevant for the purpose of promotion of payments by digital modes.
• It will study and recommend ways for leveraging Unique Identification Number or any other proof of identity for authentication of card/digital transactions and setting up of a centralised KYC Registry.
• The panel will also study introduction of single window system of payment gateway to accept all types of cards/digital payments of government receipts and enable settlements via NPCI or other agencies.