‘Introduce incentives to widen digital payments in India’
India has made significant progress on its journey towards a less cash society. Though demonetisation gave digital payments a sharp impetus, the secular growth is creditable.At just over 10 percent of PCE (Personal Consumption Expenditure) being transacted canada goose clearance digitally, the journey,however, has just begun. The Reserve cheap Canada Goose Bank of India (RBI) has canada goose outlet store uk played a key catalyst role in the digital payment narrative, with its articulated focus on the five Cs as elaborated in its Vision 2018 Coverage, Convenience, Confidence, Convergence and Cost.Setting up of the Nandan Nilekani committee to recommend steps on Deepening of Digital Payments further highlights the RBI’s intent to accelerate the pace of digital penetration across India. So as the RBI committee continues to solicit industry views, here are some suggestions to widen the net for digital payments in India.Regulate to facilitate growthOpen ecosystems with multiple players mitigate risk by allowing for redundancy, eliminating the single point of failure scenario and spurring competition between payment players, thereby giving rise to innovative product and services as well as enhanced canada goose outlet security measures and greater reliability.A competitive Canada Goose Outlet payment landscape buoyed by transparent regulatory frameworks will encourage investment and innovation in the private canada goose black friday sale sector. Establishing a level playing field with ‘incentives for all or none’ encourages competition among state owned, domestic and global players, giving consumers the best choices, value and functionalities.Technology often moves faster than regulations, as seen in the wake of IoT and cryptocurrencies. It will be fitting to canada goose uk shop transition to a principles based regulatory framework, allowing already regulated entities to innovate and co create solutions, intervening when necessary. Resources can instead be channelled towards fostering consumer protection initiatives, eliminating systemic risks canada goose uk black friday and alleviating potential single points canada goose outlet canada of failure.Security needs to be embedded deep into payment business models. With Indian digital payments expected to touch $1 trillion by 2023, efficient transaction monitoring methods like risk based authentication is required. Players can then focus on high risk categories/merchants, https://www.cheshuntteamministry.org.uk suspicious transactions etc., to reduce transaction dropouts and increase payment success rates. Geotagging canada goose outlet transactions can also provide behavioural insights to facilitate policy intervention, financial inclusion and more efficient fraud prevention.Regulations may at times stunt creativity, necessitating a regulatory ‘sandbox’ to aid innovation. This environment would, canada goose factory outlet through selective application of otherwise potentially restrictive regulations, promote concept testing and financial services innovation while protecting core customer, financial system and regulatory interests. Such canada goose outlet toronto factory sandboxes in places like the UK and Singapore have pushed over 100 applicants through their systems in just two years.Let payments profitBusinesses will not invest or innovate without the canada goose outlet incentive to profit. Market forces determining competitive prices for interchange and Merchant Discount Rate (MDR) will ensure that incentives are spread across participants, negating the need for creative solutions to offset the revenue loss with other charges.With just 4 million acceptance points for a country the size of India, introduction of an Acceptance Infrastructure Development Fund (AIDF) funded by payment players could subsidise acceptance infrastructure costs and motivate banks and other acquirers to accelerate merchant acquiring.Additionally, the regulator could also allow non banks to acquire merchants, currently exclusive to banks, giving rise to healthy competition. buy canada goose jacket This could reduce acquiring uk canada goose costs and broaden alternatives for end users. There is a canada goose outlet uk Canada Goose Parka growing challenge for standardisation on a global as well as domestic level, particularly for underlying technical standards. For central banks, the challenge is to ensure an appropriate level of involvement in such activities. Similar to the PPI guidelines, it is time for the RBI to consider interoperability of retail payment systems to ensure quicker adoption and stickiness across consumers and merchants alike.Extending credit to the needy could be as easy as leveraging NBFCs for credit card issuance. This canada goose outlet nyc form of financial inclusion will address the limited availability of short term credit, currently skewed towards affluent segments official canada goose outlet and Tier 1 cities. It canada goose outlet shop will also diversify the concentration risk in the ecosystem.Mass transit payments will soon become a growth driver for digital payments if given the right direction. Typically, these are low value, repetitive payments whose experience must be seamless, not different from a regular transaction. Enabling open loop, interoperable account based ticketing will offer consumers the choice to “just turn up and ride”. RBI has been a strong proponent of EMV contactless payments in India; it is only logical then to consider the option of enabling consumers to use their bank issued debit or credit contactless card for commutes.Also Read ‘One Nation One Card’: All you need to know about the new mobility cardMake benefits tangible and monetaryCash is seen as a no cost payment method, though its actual cost is estimated at around $28 billion in India itself. Shifting to digital payments confers a range of benefits, including formalising transaction trails, clamping down on the informal economy and curbing corruption thereby boosting tax revenue and economic growth. But for the taxpayer, it is an incentive only when heor she benefits directly from it.The RBI could explore theintroduction of tangible benefits such as income tax incentives based on the digital transactions consumers initiate, while merchants could get GST credits based on the volume of digital payments they accept. Surcharge removal and MDR subsidies on government payments like taxes, tolls and utility bills could help a large chunk of payments go digital.As the telecom revolution canada goose outlet parka has taught us, we are a nation of digitally savvy consumers. Competitive pricing, easier onboarding, seamless experiences and an incentive to transition are key drivers that continue to be important. We look forward to the views of the Nilekani committee that is expected to come up with the next set of enablers to accelerate the digital payments journey.