With the aim to promote online and card payments, the Finance Ministry on Wednesday waived off the transaction fee on RuPay debit cards, public sector banks’ debit cards and railway e-ticketing till December 31 with an advice to private sector banks to follow suit, it was announced in New Delhi.
“To promote greater use of debit cards, public sector banks and some of the private sector banks have decided to waive off the MDR (Merchant Discount Rate) charges till December 31. Other private sector banks are expected to do likewise,” the Finance Ministry said in a statement.
Following suit, leading private sector bank ICICI announced waiving off of the transaction fee for debit card transactions at ICICI Bank merchants with effect from Wednesday till December 31.
“To facilitate the use of RuPay debit card, the banks have decided to waive off transaction charges up to December 31 2016. These steps will improve the acceptance of debit cards at different establishments,” the statement said.
To encourage passengers to buy e-tickets instead of making across-the-counter purchase through cash, the Indian Railways have decided not to levy service charges of Rs. 20 for second class and Rs. 40 for upper classes on purchase of reserved e-tickets up to December 31, it said.
Daily average number of passengers buying e-tickets online is 58 percent and across-the-counter in cash is 42 percent of the total purchase of tickets.
“The effort now is to increase the purchase of e-tickets. It is expected that the above measure will encourage people to migrate to cashless transactions,” it added.
To promote greater usage of payments through e-wallets, the Reserve Bank of India has decided to increase the monthly transaction limit for individuals from Rs. 10,000 to Rs. 20,000.
All government organisations, public sector undertakings and other government authorities have been advised to use only digital payment methods such as Internet banking, unified payment interface, cards, Aadhar-enabled payment system etc. to make payments to all stakeholders and employees, the statement said.
One of the objectives of the government’s demonetisation decision, announced on November 8, was to nudge India towards a cashless society.