While presenting the budget, finance minister Arun Jaitley spoke about the need for digital and cashless transactions, and said that it “will help fight corruption”, but the incentives were largely for BHIM, the government-aided mobile wallet, and Aadhaar Pay, the unique identification enabled payment mechanism for merchants that will soon be launched.
In the process Jaitley has created a situation were the wallets and digital payment mechanisms supported by the government are pitted against private players, such as Paytm, MobiKwik and Freecharge.
Jaitley said that BHIM, which has 1.25 million users, would help in financial inclusion. Two schemes — a referral bonus scheme for individuals, and cashback scheme for merchants — will attract users to adopt BHIM, he said. Also, necessary steps will be taken to possibly “mandate petrol pumps, fertiliser depots, municipalities, block offices, road transport offices, universities, colleges, hospitals and other institutions to have facilities for digital payments like the BHIM app, he said. A proposal to mandate all government receipts through digital means beyond a prescribed limit is also under consideration, Jaitley added.
No such dole outs were mentioned for any other mobile wallet companies, such as Paytm or MobiKwik. One of the mobile wallet firm’s founder also told HT that the government could have taken some decisions to reduce service charge on transactions, like it did for e-tickets being booked through IRCTC.
Also, the Aadhaar Pay, especially to be launched for merchants who do not have debit card or use mobile wallets for transactions will not be pitted against private companies.
Jaitely said that the “mission is to target 2,500 crore digital transactions for 2017-18 through UPI, USSD, Aadhar Pay, IMPS, and debit cards”.
Meanwhile, the government is considering integrating Aadhar and BHIM, which will also mean integration of Aadhar Pay and BHIM.