The government issued draft proposals to incetivize electronic payments on 22 June. Here’s what you can expect once the proposals come into effect.

Cash payments may get expensive: The government plans to incentivize electronic transactions and disincentivize cash-based ones. The government is considering levy of a nominal cash handling charge on transactions greater than the specified limit.

Discounts likely on utility bill payments: BSNL currently offers a 1% discount on billed amount if the payment is made electronically. The government proposes that similar discounts be extended by other service providers. You can expect your utility service providers to give you similar discounts even for small-ticket electronic payments.

You may get an income-tax rebate for e-payment: The government proposes to give benefits in the form of income-tax rebates if you pay a certain proportion of your expenses through electronic mode beyond a certain limit.

Mandatory e-payments likely for high-value transactions: As of now, if you deposit 50,000 or more in cash at a bank, it is mandatory for you to provide details of your permanent account number (PAN). Similarly, the government has proposed mandating settling of high-value transactions of, say, more than 1 lakh, only by electronic means.

In case of fraud, you may get back your money immediately: In case of fraudulent transactions, the government has proposed that the money be credited back to the customer’s account and blocked. The money will be released only after the investigation is complete within a maximum of three months.

Expect increase in PoS machines: Currently, the number of points of sale (PoS) terminals as a percentage of the total number of debit and credit cards is very low. In order to build a robust infrastructure for electronic payments, the government has proposed to make it mandatory for banks issuing cards to deploy PoS terminals in a certain ratio. Also, like in ATMs, non-banks could be authorized to install ‘white label PoS terminals’.

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