Your corner kirana stores may not have any incentive to move to digital payments under the new card fee regime proposed by the Reserve Bank of India (RBI).New charges on payments made using debit cards proposed by the RBI are higher than what they were pre-demonetisation for shops with sales of over Rs 5,500 a day (more than Rs 20 lakh a year).
With the pre-demonetisation cap on charges imposed by the RBI coming to an end on March 31, the central bank has proposed a new structure with effect from April 1. Under the new proposal, shops with turnover below Rs 5,500 day will pay lesser fees (0.4%, or 40 paise on every Rs 100).
But this is a segment that does not pay taxes and, therefore, there is no fiscal incentive to move to cards. The Union Budget has proposed presumptive income tax for small and medium tax payers whose turnover is up to Rs 2 crore, and only 6% (rather than 8%) of their turnover is counted as presumptive income in respect of turnover, which is received by non-cash means.
According to a report by Ashish Das, professor of statistics at IIT-Bombay, even a medium kirana shop or a vegetable shop, which usually shuns digital payments, appears to have been shown the cost disadvantages of digital.The costs are as high as Rs 2.55 for a Rs 300 purchase transaction, or Rs 0.85 for every Rs 100 worth of digital payment transaction that is being associated with the QR code-based mobile payment.
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