While 2016′s demonetization served as a major boost to the country’s digital payments industry, with transactions doubling and trebling almost overnight, the government might be contemplating a move that would please neither companies nor consumers. A report in ThePrint indicates that the Center is discussing the imposition of a Digital India cess or a ‘security fee’ on every digital payment made in India. The suggestion has apparently been made by the Department of Financial Services.
The cess is being considered to make digital transactions more secure as the government intends to create a fund to curb instances of cyber crime that are on the rise. This is on the lines of the Swachh Bharat cess that was introduced in January 2016, and is applicable on all taxable services. The meeting that discussed the Digital India cess was reportedly chaired by the Home Minister, and attended by officials from the Ministry of Electronics and Information Technology (MeitY), Department of Financial Services, Department of Telecom, RBI, and even the Intelligence Bureau. ALSO READ: Indian companies become aware of security risks, spending to reach $1.5 billion in 2017
“It was also discussed that an Act needs to be in place for regularizing digital payments, which will be looked after by the finance ministry, and to how fix the responsibilities of agencies,” a Home Ministry official was quote as saying. Besides a ‘security fee’ on digital transactions, the government also proposes to set up a dedicated ”cyber-forensics lab” that will employ 27,500 police personnel, along with 13,000 forensic officers, and train them to handle cyber fraud cases.
MEiTY also recommends the creation of a literacy campaign on digital payments to make people aware of possible frauds. Furthermore, the Intelligence Bureau wants all digital payments companies to incorporate a software that would help detect suspicious transactions and alert customers just in time. ALSO READ: DDoS cyber attacks declined 55% globally in Q2, 2017: Report
While all suggestions from the Center augur well when it comes to privacy and security, an additional cess could put a check on the rapid growth in digital transactions in the country. And digital wallet providers, which are already grappling with a new set of RBI guidelines, wouldn’t be too pleased about it.