Surcharge removed for card and online payments for government services

MUMBAI: In a major development, no surcharge for card and online payments has been removed for government services.

A government notification to this effect follows a recent cabinet note in which towards the government has suggested removal of the surcharge as its commitment towards less cash economy, formulating a differentiated MDR framework, introduction of a formula linked acceptance infrastructure for different stakeholders, and incentivizing digital transactions.

The government has also suggested mandating payments beyond a prescribed threshold only in card/ digital mode, rationalization of telecom service charges for digital financial transactions; promotion of mobile banking; and creation of necessary assurance mechanisms for quick resolution of fraudulent transactions and review the payments ecosystem in the country.

The majority of these recommendations had been made by the Internet and Mobile Association of India (IAMAI) and Payments Council of India (PCI).

The Association has welcomed the positive and comprehensive steps taken by the government. It expressed the hope that a speedy implementation of all these recommendations will usher in more accountability, transparency and efficiency in the economy. 

The industry body in its recommendations to the Finance Ministry - ‘Draft Proposal for Facilitating Electronic Transactions’ - had focused on government departments bearing MDR cost like other merchants, differentiated MDR framework for certain cash dominated sectors, having significant ticket sizes and generating considerable volumes of transactions, installing POS devices in proportion to cards issued and incentivizing the customers and merchants for adoption electronic payments among other things.

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