Published On : Wed, Sep 6th, 2017

CAIT and ADB releases report on Universal Access to Infrastructure and Open Payment Systems

: Confederation of All India Traders (CAIT) and the Alliance for Digital Bharat (ADB), together representing 6.34 crore traders and small businesses, released a report on Universal Access to Infrastructure and Open Payment Systems as part of their recommendations for the roadmap to a cashless, digital India. The event included the launch of a website ( dedicated to Universal Access to Infrastructure and Open Payment Systems, as well as previous submissions made by CAIT as well as ADB to the Government of India. The reports calls for implementation of the recommendations made by the Watal Committee on Digital Payments as an important milestone in developing India’s Less Cash roadmap and offers specific recommendations to build usage and acceptance in India.

The idea of Universal Access and Open Payments is similar to Net Neutrality which fosters competition amongst digital payment providers, and therefore more choice for consumers and merchants. Universal Access will facilitate rapid growth in the usage and foster an “innovation race” as infrastructure and open payment systems ensure India’s consumers, businesses and government has access to world class electronic payment technology, which is safe and secure.

Addressing the Conference, Praveen Khandelwal, Secretary General, CAIT said, “The ultimate goal of merchants, traders and small businesses is to accept all forms and providers of electronic payments as there is a hidden cost to cash payments. We should be able to transact business with every customer based on his or her preferred method of payment from across a choice of digital payment providers. This is the principle behind universal access to payment infrastructure.” He also added, “A greater choice of digital payment systems allows for greater innovation and empowers consumers, merchants and traders. We urge the Government of India to implement the recommendations of the Watal Committee Report at the earliest to enable an environment that will create competition to benefit the last mile of Bharat.”

Today, 96 percent of transactions in India are done in cash and our country has only about 25 lakh POS terminals. This needs to increase rapidly given India’s population, geography and number of merchants. Additionally, the acceptance infrastructure favours large businesses and retailers. Demonetisation and GST have dramatically accelerated the need for traders, merchants and the small business community to accept electronic payments. Because of this, the transition to a Less Cash society is a massive undertaking and we need the efforts of all payment providers to reach the last mile and help achieve universal acceptance in India embodied in the goal of 2500 crore digital transactions till March 2018.

BC Bhartia, National President, ADB said, “It is in our national interest to have universal access to an open, interoperable payments infrastructure and an open payments architecture in the country. Open payment systems allow for scale and will help India take advantage of new and emerging payment technologies. We are submitting this roadmap to the Government of India and request them to adopt the recommendations of the Watal Committee Report on Digital Payments in full. The principle of infrastructure, ownership and technology neutrality as mentioned in the Watal Report Recommendations is very important for India.” He also added, “Building a Less Cash India is an eco-system problem and this requires government as well as private sector collaboration to solve this problem. To enable consumer choice and competition, platforms such as Unified Payment Interface (UPI), Bharat Interface for Money (BHIM), Aadhaar Enabled Payment System (AEPS), and Bharat Bill Payment System (BBPS) should allow open universal access to all stakeholders, as equal participants.”

Recommendations by CAIT, ADB to building Usage and Acceptance in India

To further advance the cashless vision, bring about fundamental changes to consumer behaviour and reach the 2,500 crore digital transaction goal; the Government of India should work to establish electronic payments for actual commerce as opposed to being a mechanism to obtain cash through ATMs. Following are some of the steps that can be taken by the Government:

· Create policy directives to bring category wise caps on digital payments for specific categories

· Tax rebates for consumers for certain types of digital payments. Government receipts, petrol, and education are some leading examples

· Tax rebates for merchants either in the form of sales tax relief as well as based on increase in sales using digital means of all types

· Implement Reward/Incentive Scheme for both, Merchants and Consumers across all payment options

· Create more utilisation for acceptance infrastructure and adoption of prepaid instruments

· Deployment and faster adoption of mobile QR-code based card-acceptance solutions – i.e. BharatQR to enable card acceptance through feature phones and smart phones without any additional requirement of infrastructure.

To better encourage universal adoption and socialisation of digital payments, the Government of India should:

· Remove requirement for Banks to report electronic transactions and make consumers fearless to go for cashless economy

· Form District level committees comprising of Officials and Trade representatives to monitor the adoption at District level to drive inclusive growth

· No card refusal / no surcharge rule and enforcement

· Assign card issuance based targets to all issuer banks for building acceptance infrastructure.

· Target of 40 terminals per 10,000 cards issued, which would lead to additional 15 lakh terminals as of now

· Allow Non-Bank Finance Companies (NBFCs) to issue digital payment products

CAIT has organised more than 300 trainings with partners since 2015, including “Train the Trainer” workshops in over 100 cities across the country through which we were successful in reaching out to over 5,00,000 traders.