Abstract:
Migrating from paper-based payments to electronic payments would improve the overall efficiency of the payment system, and provide meaningful cost savings and efficiency to the entire economy. With a
view to expedite migration of payment transactions to electronic mode, this study looks into some prudent measures that are expected to facilitate overall transition from cheque or cash based payments to
electronic payments. We highlight that there is a scope for rationalization of overall costs/pricing in the payment system keeping
broader objectives of acceptance and financial inclusion in mind. We have the classic example of ATM pricing in India which revolutionized its use. With pricing being based more on well laid out fundamental
principles, RBI should carry out a focused review of the bottlenecks in the country’s electronic payment system and advocate appropriate directions. Some recommendations are put forth keeping few bottlenecks
in forefront.
