CAIT demands government to close ATMs for cashless economy - RNews1 Network

CAIT demands government to close ATMs for cashless economy

cashless economy, ATM, POS, CAIT, Praveen Khandelwal, Confederation of All India Traders
New Delhi : "If the Government is serious for creating a cashless economy in India then it should close ATM machines which have become a major source of easy cash flow in the Country." said Confederation of All India Traders (CAIT) in a press statement today.

But it has said that it should be done in a phased manner and before taking such a step in initial phase the Government should minimize ATM machine and it should ensure installation of maximum numbers of Card Swipe Machines (POS terminal) at the level of merchants.

Currently there are only about 12 lakh POS terminals in the Country. The continuation of ATM machines runs contrary to the policy of ensuring cashless economy because of the fact that 95% card transactions in India are used for withdrawing cash from ATM machines.

CAIT Secretary General Praveen Khandelwal said that for cashless economy, the Government should advise Banks to waive off transaction cost levied on usage of Debit & Credit Cards. Currently the Banks usually charge 2% on Credit Card and 1% on Debit Card transactions which discourage people to embrace e-payments.

He further said that Government should also subsidies rentals or cost of card swipe machines which is another deterrent for usage of digital payments. Both usage of digital payments and availability of more and more point of sales will complement each other of more usage of payments through Cards.

Presently, the rentals of card swipe machines are about Rs.1000 per month or onetime cost of such machine ranges from Rs. 6000 to Rs.10000. The CAIT has also suggested to waive off import duty on Card Swipe Machines to reduce the cost of such POS terminals so that more and more merchants may use such machines in their business establishments. The Government should also facilitate manufacturing of POS terminals in India under its Make in India program. -said CAIT.

The traders and other business institutions should be given incentives in taxes for usage of card payments in their business transactions whereas on the other hand the consumers should also be provided incentives for usage of card payments for their personal expenditure-added CAIT.

To educate and aware traders of the Country about greater usage of card payments, the CAIT & MasterCard have jointly launched a national campaign "Master Your Card".

India is predominantly a cash-based economy, with less than 5 per cent of Personal Consumption Expenditure (PCE) of INR 70,000 crore transacted by electronically payments. There are over 500 million debit cards. But the momentum of cash is strong.

Those cards are used almost entirely at ATMs rather than at the point of sale (a ratio of 10 cash transactions to 1 at the point of sale). Considering just currency, the ratio of currency to GDP in India (12.2%) is higher than countries such as Russia (11.9%), Brazil (4.1%) and Mexico (5.7%).

The true value of electronic transactions is maximized when cards are used at the point of sale, rather than as a transactional tool to withdraw cash. Benefits flow to the entire value chain including for faster transactions and settlement, ticket lift, reduced handling costs, theft loss and counterfeit for merchants.

For cardholders, more efficient payments means more in bank accounts and less in wallets, flexibility of payment options, account management and enabling purchases on the phone or the internet.

For Government, the benefits are clearer still, with an enormous reduction in leakage from subsidies and support payments, increased tax revenue from a smaller grey economy and cost reductions from greater efficiencies.

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