India among top nations with potential for digital payments

In News

India has emerged strong, exhibiting a high potential in terms of digital payments and has been categorised under the break out segment among 60 countries, according to the Digital Evolution Index 2017.

Break out segment : Refers to countries that have relatively lower absolute levels of digital advancement, yet remain poised for growth and are attractive to investors by virtue of their potential,

What the report says?

  • The Fletcher School at Tufts University in partnership with Mastercard, unveiled the Digital Evolution Index 2017.
  • The Index is a comprehensive research that tracks the progress countries have made in developing their digital economies and integrating connectivity into the lives of billions.
  • The Index measures four key drivers – supply, consumer demand, institutional environment, and innovation.

India in the digital evolution

India has been experiencing rapid strides of progress with an evolving payments landscape, catalysed by the governments demonetisation decision. With new players foraying into the market and an entire gamut of solutions for alternate payments, the India payment ecosystem is growing each day


Source : Economic Times

GS III : Awareness in the fields of IT, Space, Computers, robotics, nano-technology, bio-technology and issues relating to intellectual property right

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Government mulls insurance cover for digital transaction frauds

Why in news ?

The government is considering based on the recommendations of the Chandrababu Naidu committee on digital payment security, including insurance cover for the victims of fraudulent digital transactions.

Recommendations

  • Interim report suggested several measures for digital payment security, including an insurance scheme to cover losses incurred in digital transactions on account of fraud, etc.
  • In order to address the apprehension of the general public in adopting digital payments, the scheme should target low-ticket transactions to cover the vulnerable sections like small merchants, farmers etc.

Fraudulent digital transaction

According to the report submitted in the Parliament

  • Number of fraudulent digital transactions in comparison to the total number of digital transactions was negligible and the government was taking steps to curb those frauds.
  • Around 1,200 crore digital transactions take place annually in the country. Of these, between 0.005 per cent and 0.007 per cent are fraudulent transactions.
  • Prepaid payment instruments, including e-wallets, the Reserve Bank of India (RBI) has started maintaining provisional data of fraudulent transactions.

Source : The Hindu

GS II : Government policies and interventions for development in various sectors and issues arising out of their design and implementation

BHIM-Aadhar –a digital payment platform

BHIM-Aadhaar platform—a merchant interface linking the unique identification number to the Bharat Interface for Money mobile application—at Nagpur. Launched on the 126th birth anniversary of Dr B.R. Ambedkar.

BHIM-Aadhaar platform

  • New interface will enable customers to make payments using a merchant’s biometric-enabled device.
  • The merchant merely has to download the BHIM app on his smartphone and link the device to an Aadhaar biometric reader.
  • Any citizen without access to smartphones, Internet, debit or credit cards will be able to transact digitally through the BHIM-Aadhaar platform.
  • To avail of this service, a customer has to first link his bank account to his Aadhaar number.

  • To make a payment, all he has to do is select the bank’s name and enter the Aadhaar number.

  • His fingerprint will serve as the password to authenticate the transaction.

  • To start with, no transaction fee will be levied on either the merchants or customers to encourage adoption of the new digital payment service, especially in small towns and rural India.

  • 27 major banks had already tied up with 300,000 merchants for accepting payments using BHIM-Aadhaar.

  • It went on to add that all public sector banks have been instructed to go live with Aadhaar Pay.

Two New Schemes

  • Two new incentive schemes for the BHIM app—cashback (for merchants) and referral bonus (for customers).
  • The schemes will start from 14 April and end on 14 October
  • Under the referral bonus scheme, an individual will earn Rs10 for every new referral made—i.e., educating another person or merchant about the BHIM app and ensuring that they carry out three transactions using the same.
  • Under the cashback scheme, merchants can earn up to Rs300 per month for transactions made using BHIM

BHIM App : 20 million people have downloaded BHIM so far, and payments worth Rs823 crore have been made. The app was launched on 30 December. Three new languages—Punjabi, Marathi and Assamese have gone live on the app.

Indian for Digital

  • One of several measures aimed at promoting digital transactions in the aftermath of the 8 November demonetization of high-value banknotes, which triggered a nationwide cash crunch.
  • The time is not far when premise-less and paperless banking will become part of people’s lives.

Source : Livemint, pib

GS II : Issues relating to development and management of Social Sector/Services