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Debit Cards Are Used Primarily for Cash Withdrawals
Nov 23, 2016

The Reserve Bank of India (RBI), had earlier this year, shared a concept paper on the usage of card acceptance infrastructure in India. The paper provides essential data to understand how transactions are carried out in our country. Take for example, the usage of debit cards. These debit cards which can process payments using the infrastructure of Visa, Mastercard or our own RuPay, are primarily used for cash withdrawals at ATMs.

This essentially means that we are indirectly promoting cash transactions in the economy. The whole purpose of using digital payments was to encourage people to go cashless by using Point of sales (POS) terminals setup at the merchant location. However, we feel that the government needs to be proactive in incentivizing and facilitating digital payments in India. There is a cost which is currently borne by the merchants who use POS terminals. So, efforts should be made to reduce them.

Doing this will bring in higher accountability for large transactions which generally evade getting taxed and thus leads to creation of black money. This will also intensify the war against black money which the government has now begun. Vivek Kaul, has shared a special report on what the war on black money means to you. Be sure to grab a copy of Demonetisation - The Good, Bad and Ugly.

Data Source: RBI

This Chart Of The Day was published in The 5 Minute WrapUp - L&T Layoffs the Tip of the Iceberg

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