India puts emphasis on e-payments with new initiative
The Reserve Bank of India (RBI) has published a new document outlining how the country can achieve a tripling of the number of digital payments and establish India as “a powerhouse of payments globally”.
The RBI’s ‘Payments Vision 2025’ document also outlines plans to ring-fence domestic payment systems, including the need to mandate the domestic processing of payment transactions, to protect against potential criminal activity.
The tagline of the document is ‘E-Payments for Everyone, Everywhere, Everytime’ (4Es), with an overall objective “to provide every user with safe, secure, fast, convenient, accessible, and affordable e-payment options”.
Rajesh Mirjankar, MD and CEO, Kiya.ai, said the Payments Vision 2025 is progressive and has an outlook to establish India as a powerhouse of payments globally.
“One of the most important forward-looking initiatives is the global outreach of UPI, RTGS, NEFT and RuPay cards with internationalisation, where bilateral treaties with nations especially covering the US dollar, GB pound and Euro will hugely benefit Indian residents and their counterparts overseas with online realisation at lesser costs,” he said.
Dilip Modi, founder of Spice Money, said: “While the pandemic raged across the country, India was on a path to realising its payments vision, and digital payments grew phenomenally in volume and popularity, with a constant thrust from the government and the rise of rural fintechs.
“It is heartening to note that the RBI takes measures that will further enhance safety and security for rural citizens, where digital and financial literacy continues to be core challenges,” he said.
Anand Kumar Bajaj, founder, MD and CEO of PayNearby, said it was important that inclusion and innovation are two of the pillars of the ‘E-Payments for Everyone, Everywhere, Everytime’ document. “To pursue the collective goal of financial inclusion for all, it is crucial to deepen our engagement with stakeholders and extend our outreach deeper into the real economy.
“Therefore, engaging with private enterprises that are present in the lives of people and driving commerce up to the bottom of the pyramid is important,” said Kumar.
Avinash Godkhindi, MD and CEO, Zaggle, said India has made phenomenal strides in payments in the last few years, UPI and RuPay being the biggest success stories. “Now taking them global will clearly establish India as the undisputed global leader in payments. Linking credit cards to UPI is another gamechanger as would globalisation of India’s Central Bank Digital Currencies (CBDCs),” said Godkhindi.
According to RBI stats, total digital payments have increased by 216% and 10% in terms of volume and value, respectively, for the month of March 2022 when compared to March 2019.
At the launch of the document, the central bank said that ‘Payments Vision 2025’ was developed after considering inputs from various stakeholders and guidance from the Board for Regulation and Supervision of Payment and Settlement Systems of the RBI.
Tax to rise on selected goods and services from 18 July
From July 18, tax on over two dozen goods and services will be raised, the Goods and Services Tax (GST) Council has announced. Products affected include unbranded food items, curd and butter milk, low-cost hotels, cheques and maps.
At the same time, tax rates will be lowered for a small number of goods and services, including truck rental where fuel costs are included, and scrapped for products imported by private vendors for use by the armed forces.
The GST Council said more than a dozen States wanted the GST compensation to continue for longer.
The hike in GST levies include tweaks for 17 goods and services, including LED lights, solar water heaters and writing inks. It said this was “to correct anomalies that had crept in from inverted duty structures where tax rates on inputs were higher than the final product”. Separately, the tax rate on Tetra Pak has been raised from 12% to 18%, while cut and polished diamonds will now attract GST at 1.5% instead of the prevailing 0.25%.