BHIM, digital transactions get a boost from government

The Bharat Interface For Money app was launched on the iOS platform earlier this month. It is also available on the more popular Android platform. There have been over 17 million downloads of the BHIM app so far.

The central government plans to launch, within a month, two schemes -- referral bonus scheme for individuals and cashback scheme for merchants -- to promote the indigenous digital payments app BHIM.

“We have completed inter-ministerial discussion. Cashback schemes announced in the Budget 2017-18 would be implemented in one month,” NITI Aayog Chief Executive Officer Amitabh Kant told a press conference on Tuesday.

The Bharat Interface For Money app was launched on the iOS platform earlier this month. It is also available on the more popular Android platform.

“There has been over 17 million downloads of the BHIM app so far,” Kant said.

In his Budget speech for 2017-18, Union Finance Minister Arun Jaitley had said the BHIM app would “unleash the power of mobile phones for digital payments and financial inclusion”.

Kant said the use of other digital payment options such as Unstructured Supplementary Service Data (USSD), Unified Payments Interface (UPI) and Aadhar-Enabled Payment Systems (AEPS), too, had seen significant increase in usage.

Data showed that the volume of transactions through the USSD service increased by 4,390 per cent between November 2016 and January 2017, while it increased by 4,161 per cent through the BHIM app and 285 per cent through AEPS during this period, he said.

He also said the Centre was looking to lower the Merchant Discount Rate (MDR) charges to encourage digital payments.

Referring to RBI’s draft circular on rationalisation of MDR for debit card transactions, Kant said, “We are examining RBI’s draft circular on MDR. There are challenges to see MDR rates come down...We will meet those challenges.”

Last week, the RBI proposed to drastically cut MDR charges on debit card payments from April 1 with a view to maintain momentum of digital transactions post note ban, especially among small merchants.

For small merchants with annual turnover of Rs 20 lakh and special category merchants, like utilities, insurance, mutual funds, educational institutions and government hospitals, the MDR charge has been proposed at 0.40 per cent of the transaction value.

The MDR charge, which is levied on debit card transaction, would be even less at 0.3 per cent if transaction is through digital PoS (QR Code), the RBI had said in the circular.

The existing MDR is capped at 0.75 per cent for transactions up to Rs 2,000 and 1 per cent for over Rs 2,000.

However, there is no RBI cap on MDR on credit card payments.

Meanwhile, Kant also informed that nearly a million consumers and merchants had been awarded Rs 153.5 crore in the last 58 days under Niti Aayog’s schemes to promote digital payments.

According to the latest figures released by the National Payments Corporation of India (NPCI), which has been executing the schemes, nearly 10 lakh consumers and merchants have been disbursed over Rs 153.5 crore as reward money till February 20.

The winners belong to diverse socio-economic backgrounds, including farmers, merchants, small entrepreneurs, professionals, housewives, students and retired persons.

While a majority of the winners are in the 21-30 age group, a significant number is also above 60 years of age.

On December 15, the government had launched “Lucky Grahak Yojana” and “Digi-Dhan Vyapar Yojana” to boost digital transactions post demonetisation. The schemes would remain open till April 14.