Kudos to Ishan Bakshi for his report, "Cash deals cost 1.7% of GDP: Visa" (October 6). The report made a compelling case for moving personal payments to the digital platform and reaping enormous savings.
While there would be hurdles in setting up infrastructure in the hinterland, what is depressing is that we have not made adequate use of available resources in the major cities. Merchant establishments also discourage card payments by levying additional charges. Several establishments selling expensive items such as jewellery charge an additional two per cent or so on usage of cards.
Whether this is used as a tactic to discourage card usage is anybody's guess. The plea that banks charge them a fee on transactions and this is being passed on to customers does not pass muster. Banks charge for all terminals provided by them but most of the establishments do not levy any extra charge on patrons.
Merchants accepting cards would not not have to count, store or deposit cash in banks. Also, the credit for the entire day's transactions is available the next day. These benefits can offset the small charge levied by banks for the use of terminals.
Merchants should be prohibited from levying extra charge on card usage. This will encourage customers to use cards for all transactions. For starters, in the major cities, payments over a certain amount, say, Rs 2,000, should be made only by way of credit or debit cards. Patrons extensively using cards could be given tax concessions.
Also, high denomination notes may be demonetised. If they are taken out of circulation, the torture of lugging large bundles of small denomination notes would force people to switch to cards.
K V Premraj, Mumbai
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