Showing posts with label debit card. Show all posts
Showing posts with label debit card. Show all posts

Saturday, February 18, 2017

RBI mulls giving banks freedom to fix bank service charges for transactions



In an attempt to promote cashless transactions in the country, Reserve Bank of India (RBI) has given banks the freedom to fix bank service charges for transactions, stated Santosh Kumar Gangwar, Minister of State in the Ministry of Finance, in Lok Sabha on Friday. 

RBI has deregulated interest rates on credit card dues. Interest rates are determined by banks with the approval of their respective Board of Directors subject to regulatory guidelines on the interest rate on advances issued by RBI from time to time. RBI does not maintain information on the rate of commission charged. 

National Bank for Agriculture and Rural Development (NABARD) has approved a scheme for giving 0.5 percent incentive on payments made through the Aadhaar Enabled Payment System (AEPS) to merchants. 

With regards to debit card transactions on PoS devices, between January 1 and March 31, 2017, Merchant Discount Rate (MDR) has been capped at 0.25 percent for transaction up to Rs. 1,000, and for debit card transactions value between Rs. 1,000 and Rs. 2,000, MDR has been capped at 0.5 percent. 

RBI has decided that till March 3, 2017, banks and prepaid payment instrument issuers shall not levy any charges on customers for transactions up to Rs. 1,000 settled on Immediate Payment Service (IMPS), Unstructured Supplementary Service Data (USSD) and Unified Payments Interface (UPI). 

Further, Government has issued a direction in public interest to all public sector banks not to charge fees for transactions settled on IMPS and UPI in excess of rates charged for National Electronic Funds Transfer (NEFT) for transactions above Rs. 1,000, with service tax being charged at actual; for USSD transactions till March 3, 2017, above Rs. 1,000, a further 50paise discount is provided. 

NPCI has waived switching fees for RuPay Card transactions (both for PoS and e-commerce), IMPS, UPI, National Unified USSD Platform (NUUP) and AEPS, with effect from January 1 to March 31, 2017. 

Credit card, debit card, charge card and other payment card services by banks have been exempted from payment of service tax for transactions of up to Rs. 2,000. The government has introduced Lucky Grahak Yojana for customers and Digi Dhan Yojana for merchants to promote means of cashless transactions. 

In terms of Office of Controller General of Accounts Office Memorandum dated December 14, 2016, the applicable Merchant Discount Rate (MDR) charges on debit cards for payment up to Rs. 1, 00,000 shall be absorbed by the Government. 

In terms of Department of Public Enterprises letter dated December 9, 2016, all Central Public Sector Enterprises (CPSEs) are required to ensure that transaction fees, MDR charges associated with payment through digital means shall not be passed on to the consumers and all such expenses shall be borne by CPSEs. 

RBI has also cautioned the users, holders and traders of Virtual Currencies (VCs), including Bitcoins about the potential financial, operational, legal customer protection and security related risks that they are exposing themselves to. The creation, trading or usage of VCs including Bitcoins, as a medium for payment have not been authorised by the Reserve Bank of India. 


Friday, December 30, 2016

Frequent rule changes done to corner the corrupt: PM Modi

Image result for modi demonetization

Prime Minister Narendra Modi has justified frequent amendments and U-turns in the implementation of government's demonetisation policy, saying one required to "stay a step ahead of the enemy+ ".



In an interview to India Today, Modi seemed to suggest that frequent changes in the implementation of the policy were deliberately done to corner those who were trying to defeat the purpose of demonetisation by circumventing it.



"Regarding the frequent modifications, one must be able to distinguish between niti (policy) and ran-niti (strategy) and not put them in the same basket. The decision of demonetisation, which reflects our niti, is unequivocally clear, unwavering and categorical. Our ran-niti, however, needed to be different, aptly summarised by the age-old saying of 'Tu daal-daal, main paatpaat'.



To stay a step ahead of the enemy," Modi said. Modi hit out at his detractors, saying the decision to demonetise "is so huge that even our best economists remain confused in their calculations. India's 1.25 billion citizens, however, have welcomed it wholeheartedly and supported it even in the face of great personal difficulties+ , intuitively understanding its impact and importance."



He said demonetisation was done not for some short-term windfall gain, but for " a long-term structural transformation+ ". Attacking the Congress, the PM said he "pitied" its leadership for the "desperation" it had been exhibiting on this issue. "On the one hand, they say took this decision for political dividends, and on the other, they say the people have been troubled and are deeply unhappy. How can the two go together?" he said.

Modi was scathing in his attack on his predecessor, Manmohan Singh, who had described the execution of demonetisation as 'monumental mismanagement' while speaking in Parliament. "It is interesting that the words 'monumental mismanagement' come from a leader who has been at the helm of India's economic journey for around 45 years - from being the chief economic advisor to the DEA secretary, RBI governor, Planning Commissiondeputy chairman, finance minister and Prime Minister — all the while during which large sections of our society have continued to live in poverty and deprivation," Modi said.

Wednesday, September 21, 2016

NPCI aims to corner 50% share of debit card market



 Digital payments in India are likely to create a $500 billion ecosystem by 2020, according to a report by BCG and Google released in July. Photo: Reuters

The National Payments Corporation of India (NPCI) is targeting a 50% market share in debit cards by 2018 through its RuPay network as it ties up with banks and more Indians get access to banking services.


The payment services provider is also planning to introduce new products such as an electronic toll-collection system, contactless tap-and-go cards and credit cards in the next three months to boost its share of consumer wallets.

“We are aiming for 320 million debit cards by March 2017. In a year after that, we will constitute about half of the total market,” said A.P. Hota, managing director and chief executive officer of NPCI.

At the end of July, the number of debit cards issued by Indian banks was 688.2 million. NPCI claims that 290 million, or 37%, use the RuPay card payment settlement system. The rest are serviced by Visa and Mastercard.

“When you include commercial banks and cooperative banks, there are about 1,600 banks in India. Of this, we have tied up with 700 banks already, which has helped us cover most banked customers,” Hota said.

On Monday, the company said that 46 new banks had joined its list of shareholders, taking the total to 56.

The number of debit cards issued in India has increased two-and-half times in the four years up to March 2016 with the introduction of the Jan-Dhan Yojana. However, at least 190 million cards issued under the scheme have seen very few transactions as the cardholders belonged to rural areas and lower income segments, according to a 11 March JM Financial Ltd report.

NPCI is also introducing three new products before the end of this calendar year. The first is an electronic toll-collection system likely to be launched by 31 October. This will be available across 395 toll collection plazas on national highways in its first phase. The toll plazas will have terminals that will verify vehicles on the basis of a device, which will automatically debit money from a prepaid account. State Bank of India, ICICI Bank, Axis Bank and IDFC Bank are on board to issue electronic toll-collection devices across toll plazas, said Hota.

NPCI officially launched the Unified Payments Interface (UPI) in April, allowing banks to develop applications in a way that will let customers to instantly transfer money to each other. This is widely expected to transform the payments business in India, as customers do not need to exchange bank account details to transfer money.

Another product is a contactless tap-and-go card which can be used to make small value payments, likely to be launched in November. NPCI is also looking to launch credit cards by December.
It has currently tied up with 10 banks and is looking to issue a minimum of 5 million cards initially, Hota said.

Discussions are currently on to finalize charges and other product details, he added, without disclosing the names of these banks as final agreements had not been signed.

“Digital payments are the future for us and NPCI has done quite a bit in improving the environment that supports it. It shouldn’t be longer than 18-30 months before we see explosive growth in these transactions,” said Alpesh Shah, senior partner and director at consulting firm BCG.

Digital payments in India are likely to create a $500 billion ecosystem by 2020, according to a report by BCG and Google released in July. Most of this would be due to better peer-to-peer transactions, the report had said.








Wednesday, March 4, 2015

Govt forms panel to suggest ways on promoting Rupay card transaction

The government has formed a committee which will come out with structures that can be put in place to encourage use of credit or debit cards, Finance Secretary Rajiv Mehrishi said today.

"We have formed a committee to look at what are the best ways to incentivise use of credit or debit cards ... The committee will look at what structures can be put in place to encourage use of credit or debit cards," Mehrishi told reporters here.

Finance Minister Arun Jaitley in his maiden full-year Budget had said the government will announce incentives to encourage card usage by consumers to curb black money flow into the system.

"One way to curb the flow of black money is to discourage transactions in cash. Now that a majority of Indians has or can have, a RuPay debit card, I, therefore, propose to introduce soon several measures that will incentivise credit or debit card transactions, and disincentivise cash transactions," Jaitley had said .

Elaborating further, the Finance Secretary said, "Several things are in considerations, for example incentivising banks ... You know there are transaction costs which government can perhaps share."

"But there are also otherwise, you know what I would say to disincentivise cash transaction, any expenditure by a person in a five star hotel above Rs 5,000 have to be settled using credit card, there can be also decisions like that."

Till January 31, over 11 crore Rupay cards have been used under Pradhan Mantri Jan Dhan Yojana. This will definitely help banks to encourage customers to go digital with their transactions.