According to various newspaper reports, the Government of India has recently planned to make quick response (QR) code-based payment method using the Unified Payments Interface (UPI), mandatory for all shops and establishments beyond a certain threshold.
This Government measure is aimed at promoting digital payments in business to consumer (B2C) transactions and at curbing tax evasion in the country. Further, this move may help consumers to make cashless and hassle-free transactions and also enable shopkeepers to avail Goods and Services Tax (GST) benefits.
With the aim to establish a cashless economy in India, the Government had earlier allocated a target for banks to deploy 20 lakh physical and mobile points of sale (PoS) in FY 2018-19. But it has been noted that only 44% of the target has been achieved up to 31.01.2019.
But in furtherance of its objectives, the Government has recently raised its target to 4019 Crore digital payment transactions by FY 2020, in order to encourage digital payments across the country. Out of the said target, a target of 3411 Crore digital payment transactions has been allocated to banks and further, they have been mandated to deploy 8.5 Million PoS terminals across rural areas and north-eastern states of India.
Although, as per various newspaper reports, a few states like West Bengal had previously opposed the move to roll out incentives to encourage digital transactions, as it may adversely affect rural consumers, but the Government seems to be positive in its endeavour to promote digital payments as the preferred option for consumers and continues to plan for introducing incentives to customers who prefer digital payment transactions over cash-based transactions.
Senior Legal Associate
The Indian Lawyer