Budget 2022: Fintech sector’s checklist for Nirmala Sitharaman

Physical wallets were largely replaced by online wallets and QR codes when coronavirus pandemic forced everyone to stay indoors. Due to this, industry players expect the Centre to look at reducing the merchant discount rates levied on merchants for processing online, debit and credit card transactions.

Fintech major BharatPe’s CEO Suhail Sameer has urged the government to reduce merchant discount rate (MDR) for online and card payments. Sameer also noted that the government should look at making MDR zero or to offer incentives or subsidy to small merchants accepting card payments.

He added that this will lead to increased adoption of digital payments and enable fintech firms to facilitate higher loans to the merchant partners. Sameer also talked at length about fintech companies working in tandem with MSMEs to ensure easy access to credit for digital acceleration.

“Today, fintech companies are working closely with MSMEs and offline merchants to fund their digital acceleration through easy access to credit. The uncertainties are likely to continue with new waves of COVID-19 and businesses will experience sudden shifts of opening and closing economies. In the upcoming budget, I hope that the government rolls out conducive policies that further enable fintechs to address that further enable fintechs to address the credit gap in the country,” the BharatPe CEO said.

Sameer also hoped that the government will announce initiatives to ensure easy availability of funds for new-age fintechs working with unbanked population. He recommended that the government to explore the possibility of forming a Central Bureau for Fraud to report and ensure data security and privacy to the industry and the consumers.

Besides this, Sameer also backed the National Startup Day as a great initiative to build India as a global hub for startups and innovation. He added that the Centre should also look at initiatives like tax and GST relaxation to help businesses including SMEs and young companies.

Experts are also looking at budgetary concessions like GST waivers for digital transactions and incentivisation for semi-urban and rural areas to boost cashless payments amongst the larger population. Hitachi Vantara India Managing Director Hemant Tiwari also highlighted that the government should also look at setting up dedicated funds to strengthen the digital infrastructure of co-operative banks.

“Digital India requires a robust and efficient financial system. Setting up dedicated funds to strengthen the digital infrastructure of co-operative banks can lead to a more inclusive and compliant financial ecosystem in India. Budgetary concessions, such as GST waivers for digital transactions, along with appropriate incentivisation for semi-urban and rural areas, will further boost cashless payments amongst the wider population. In my opinion, these measures can pave the way towards a thriving digital economy,” stated Tiwari. 

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