Finance Minister Arun Jaitley today said the government and the Reserve Bank are taking measures to bring down the digital transaction cost with an aim to move towards a less-cash economy.
Chairing the 5th Meeting of the Consultative Committee attached to his ministry, Jaitley said digital transactions are a parallel mechanism, not a substitute, for cash transactions and "cashless economy is actually a less cash economy as no economy can be fully cashless".
Regarding the availability of point-of-sale (POS) or card swiping machines, he noted POS machines are manufactured by two companies in China and the government has waived duties on them so that these machines become cheaper and reach the shopkeepers easily.
Banks may run up against a shortage of POS machines as the process of procuring them from China could take weeks, according to media reports. BloombergQuint reported earlier that Verifone and Ingenico control nearly 80 percent of the POS market.
Jaitley further said the government and the RBI have taken various steps to bring down the cost of digital transactions and specifically mentioned about MDR charges, which are charges that merchants pay on each card transaction to banks. These charges and the expensive POS machines have been big reasons behind the low adoption of POS machines by merchants in India.
Jaitley also told the participating Members of Parliament (MPs) that the government is trying to encourage digitisation as much as possible because an excessive cash economy has its own social and economic costs and consequences.
Jaitley further said the government is conscious of the need of cyber security of high level to secure digital payments.
He assured MPs that the government and RBI are fully aware of cyber security challenges and ensuring strong firewalls around the systems.
with PTI inputs