Arun Jaitley is confident charges on digital transactions will go down, but is it feasible?

Finance Minister Arun Jaitley is confident charges on payments made through digital modes will go down with increase in volumes.

Jaitley said newer technologies are making digital transactions cheaper and it is expected that more people would move towards them.

He added the Reserve Bank of India (RBI) is working to fix the Marginal Discount Charges (MDR) for debit card transactions above Rs 2 lakh.

"RBI is deciding on this....this is work in progress. I am sure as volumes (of digital transactions) are increasing, the charges will come down," the Finance Minister told members of the Rajya Sabha during the Question Hour.

Jaitley said that under the Payments and Settlements Act, the RBI has held that for cash transactions upto Rs 1,000, the MDR rate would be 0.25 per cent while for transactions upto Rs 2,000 it has been fixed at 0.50 per cent.

He said that for transactions above Rs 2,000, the RBI is considering the rate to be applied and this is a "work in progress."

Jaitley also said the rate for debit card transactions in petrol companies, the charge is being absorbed by oil companies, while it is being absorbed by the government for digital transactions for rail travel.

Responding to another question on the demonetisation decision, Jaitley said the RBI had begun printing the new currency well in advance but it was the process of recalibration of ATM machines that took time.

Recalibration could not be done in advance for reasons of secrecy, he said.

(Image: Reuters)