"Upgraded version of USSD (Unstructured Supplementary Service Data) should be rolled out by December 25, 2016," suggested the panel on adoption of digital payments in its recommendation submitted to the Finance Ministry.
According to an official statement today, the panel, whose convener is Andhra Pradesh Chief Minister Chandrababu Naidu, has suggested that the procedure for simplified Know Your Customer (KYC) using Aadhaar needs to be adopted.
The meeting followed the deliberations held by Naidu, Vice Chairman of NITI Aayog Arvind Panagariya with the Governor and senior management of RBI and CMDs of major private and public sector banks on Thursday in Mumbai.
The Maharashtra government informed the meeting that it was introducing an Aadhaar Bill in the legislative assembly to give legal status to the use of Aadhaar number for various purposes.
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It also informed that it had launched a major campaign to promote digital transactions.
Madhya Pradesh reported that it had initiated a major programme to digitise the transactions in state-owned mundies.
While noting that RBI and banks are largely supportive of the measures to promote digital transactions, the panel suggested steps including easing the digital payment operations at the level of merchant.
It said that UIDAI would shortly roll out the common Android-based Aadhaar Enabled Payment System (AEPS) application developed in collaboration with TCS that can be downloaded by the merchants.
In order to use this application for carrying out cashless transactions, merchants will need a smartphone and a fingerprint scanner.
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According to the report, the inter-operability of all pre-paid instruments on the United Payments Interface (UPI) platform alongwith a common QRCode would greatly simplify transactions.
The Merchant Discount Rate (MDR) regime needs to be streamlined, it said.
To popularise digital transactions, the Committee proposed a detailed review of the MDR regime, inter-linking of various digital payments platforms such as Unstructured Supplementary Service Data (USSD) with UPI, self-boarding by small merchants and a common application for UPI, it added.
It was decided that Secretary, MeitY will prepare a status note on the procurement options for these devices, it said.
The Committee took note of the Subsidy Scheme implemented by NITI Aayog to directly disburse funds to District Collectors based on their performance.
The Committee decided to recommend to the Government that the first 50 Gram Panchayats that become cashless should be honoured.
It was also decided to designate specified villages as Cashless Transactions (CLT) villages on the lines of Open Defecation Free (ODF) Villages. An accreditation system for certifying villages as CLT may be developed.
In a follow-up meeting of Naidu and Vice-Chairman, NITI Aayog with the major telecom companies, the need to address issues relating to sufficient bandwidth for financial transactions, last-mile connectivity, affordability and security of digital transactions were discussed and several action points identified.
The Committee of Chief Ministers has been set up by NITI Aayog to examine and promote the adoption of digital payment systems across the country.