On 29th of February, 2016, The Finance Ministry through a cabinet note and subsequently the RBI through a concept note, issued broad guidelines on the subject of development of acceptance infrastructure to support digital payments.
The RBI has noted, the use of digital channels for accessing banking and payment services is on the rise and is poised for significant growth in the country. The Reserve Bank has been initiating new policies as well as reviewing existing policy measures for facilitating demand and supply of digital payment services and also ensuring safety and security of such transactions. Recent announcements of the Government also support and reinforce the migration from cash payments to promotion of card and other digital payments.
In CAIT’s view, the digitisation of payments for small and medium traders is important for a variety of reasons. First, it will make transactions more secure for merchants by using state of the art technologies designed to safeguard data. Second, it will help merchants to increase the value of transactions: research shows that consumers are willing to make higher value purchases when using debit and credit cards. Digital transactions can also create an instant payment trail for merchants, making it easier to track and record transactions. Finally, digitisation presents an effective way to promote customer loyalty because merchants can work with digital payment companies to analyse the priorities and spending habits of consumers using sophisticated analytical tools, trends and tailoring their businesses in response. Most importantly, consumers will have greater choice when making transactions.
The Importance of the Digitisation of Payments for Small and Medium Traders
Technologies designed to safegaurd data make
transactions more secure.
Helps merchants increase the value of transactions.
Effective way to
promote customer loyalty.