Posted on: December 9, 2016

Major Benefits Announced for Consumers Making Digital Payments

Continuing with its push towards a cashless digital economy, government has introduced additional schemes to promote the use of digital payment options as opposed to cash-based transactions. These new digital payment benefits include the following:

•    Nil Service Tax on transaction charges for individual digital payments not exceeding Rs. 2,000
•    0.75% discount on sale price purchase of diesel/petrol using digital methods
•    Up to 0.5% off on railway monthly passes/seasonal tickets
•    Free accident insurance cover not exceeding Rs. 10 lakhs on booking rail tickets online
•    8-10% off on insurance policy purchases made through PSU insurer web portal
•    Avail 10% discount on toll tax by using Fast Tags/RFID tags

The newly introduced benefits are expected to further expand the growing customer base for cards and mobile wallets. 

Speaking about these incentives provided by the government, Sahil Arora, Head of Payment Products, Paisabazaar.com, said, “These discounts on digital payments are a good move by the government towards promoting a cashless economy. The user base for digital payment options such as credit cards is definitely going to expand as a result of demonetization and these benefits. We expect credit card penetration to increase by almost 20% by the end of 2017.” 
       
The new set of benefits when transacting via the digital route adds to the previously announced benefits — zero MDR (merchant discount rates) and cost of transaction fees. These costs are currently being borne by the applicable central public sector undertaking and central government departments. 

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