People avoid payment through credit-cards because traders demand transaction-charge of two-percent extra especially for commodities with low profit-percent. Otherwise also traders even having sufficient trade-margins usually make excuse that credit-card machine is not working, to save two-percent transaction-charge to be paid by them, this being main reason for failure of converting cash-payments by digital-payments. To promote business and profit through credit-cards, banks offer promotional offers in collaboration with marketing firms for various commodities. Banks even give exchangeable credit-points for use of credit-cards.
Best way to promote digital-payment is that Banks may be directed to reduce transaction-charges drastically to say half-percent, and by doing away with all types of promotional offers. Such nominal transaction-charge should be paid by central government rather than traders. Then no trader will hesitate in accepting payments through credit-cards. It may be compulsory for all registered GST dealers dealing in cash to compulsory have minimum two sets of credit-card machines to avoid usual excuse of credit-card machines not working. Traders must have sufficient proof of banks not rectifying faults in credit-card swapping-machines failing which traders may be liable for heavy penalty for avoiding payments through credit-cards. Banks will also be in advantage because of multiple times use of credit cards. Government gain through drastic increase in revenue-earning because tax-evasion involved through cash-payments
Reserve Bank of India (RBI) should also fix maximum interest-rate on delayed payments for credit-cards. Malpractices of imposing penalties should also be regulated by RBI. Presently in case of say crossing limit by say a petty amount of rupees 100, banks impose over-limit penalty of rupees 500 plus GST. System of over-limit penalty should be abolished with banks having liberty to decline payment beyond permissible limit to the customer.
MADHU AGRAWAL