New move could make digital payments costlier
Words by: FWD Media
The Indian government seems to be deep in thought over a new proposal that could soon make digital payments costlier. According to reports, the proposal which was put forth at a high-level meeting involved introducing a cess or ‘security fee’ on all digital transactions in India. The idea being that the funds accumulated through the cess would be utilized to battle the increasing menace of fraud in digital payments and increase in cashless Ponzi schemes.
The Digital India programme, one of the pet projects of the current government, envisions a cash-less or a digitally primed economy despite the hurdles of implementation in a agrarian and cash dominant society as ours. However, data after data has suggested that eleven months after the demonetization project people have slowly begun going back to the cash transactions. An attributing factor has been that the concessions given to merchants in terms of Merchant Discount Rate have been withdrawn. The current proposal runs the risk of running counter-productive to the government’s aim of encouraging digital payments.
Nasscom Internet Council head Prasanto K. Roy while talking to ThePrint said that although a “special fund could help develop security infrastructure, hire experts and secure online transactions, though a cess on digital transactions isn’t the best way of doing it. The Ministry of Finance and the Ministry of Electronics and Information Technology (MeitY) need to encourage digital transactions by making them cheaper, not more expensive. There are other, better ways to fund digital security.”
The meeting which saw major stakeholders discuss and recommend ways on making these digital transactions safer also discussed the possibility of introducing an Act intended at regularizing digital payments, which would come under the ambit of the finance ministry.
The proposals have come on the heels of the increase in fraudulent transactions as people share their passwords, ATM pins, 3D secure pins online during payments. One of the steps being promulgated is the creation of a dedicated cyber-forensics lab. Suggestions from the Home Ministry include a dedicated team of 27,500 police personnel, and 13,000 forensic officers trained to tackle cyber fraud cases.
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