If you MasterCard or Visa card users then your problems are going to increase in coming days. As the government has exempted bank charges on E-payments for the business with an annual turnover of Rs 50 crore, payment through MasterCard or Visa card could witness a downfall. Finance Minister Nirmala Sitharaman in her maiden Budget 2019 speech on July 5 made this announcement in Parliament.
As Centre is pushing for maximum use of E-payment or digital payment method after this concession the businessmen who used to make transaction by MasterCard Or Visa card would opt for electronic payment method. From now businessmen would use UPI payment method more instead of MasterCard or Visa card. This could turn as bad news for the retailers using MasterCard or Visa card for transaction.
Notably, retailers with a turnover of Rs 50 crore are more dependent on credit card transactions, due to which they have to pay 2 per cent extra through merchant discount rate (MDR). In short, for retailers, E-payment is beneficial as they did not need to pay extra amount for charges.
Government push for an increase in E-payments:
In the Union Budget 2019 speech, Finance Minister Nirmala Sitharaman said that it is mandatory for these companies that they have to keep electronic payment option available for the transaction. These electronic payment channels include Bhim UPI, UPI-QR Code, Some Debit Card, National Electronic Fund Transfer (NEFT) and Real-Time Gross Settlement (RTGS). Bank and RBI pay the fee if one makes payment through any of these modes.
Government push for an increase in Digital Payment:
In order to facilitate the e-payment for these businesses, new rules will be implemented under section 269SU of the Income Tax Act from 1 November 2019. So, once this rule is implemented, the UPI-based payment use will get a boost. Also, the government's digital payment plan will get a good hike.
Meanwhile, some people are also asserting that the government is trying to draw a line between E-payments and other cards (MasterCard and Visa card) payments transaction.