Govt depts to accept credit/debit card payments soon

Instructions gone to install POS terminals before Dec 31


THIRUVANANTHAPURAM: The government departments and institutions in the state have been told to be ‘digitally ready’ within one month to accept all payments from the people.

A recent Finance Department circular has sought the state’s departments and institutions to install point of sale (POS) terminals within their offices by December 31, 2018, to facilitate the payments using Debit and Credit Cards.

The government is keen to ensure that no extra monetary burden should be passed on to the people following this revolutionary transformation of payment mode that is expected to have multiple benefits such as ease of doing business, lower cost for cash handling and better efficiency in record keeping of accounts in the state that has pioneered several other innovative moves.

“Extra payment would discourage people from making digital payment. Government has therefore decided that its departments/institutions receiving payment should absorb the Merchant Discount Rates (MDR), which is the payment to be made to the bank for each transaction by the party that receives payment,” the official statement said further.

The Finance Department said the (Kerala) Government institutions need to take all steps necessary towards accepting payments from citizens at various departments through digital means.

Though there are digital payments taking place currently at government departments, they are basically done through banking channels and through payment gateways established at various government institutions

“Other modes of digital payment such as credit/debit card through POS machine (point of sale terminal), Bharat QR Code, BHIM ((Bharat Interface for Money), UPI (unified payment interface) etc, are yet to be used for receiving payments in Kerala,” added the official statement.

With regard to installing POS terminals and the smooth process of the acceptance of payments, all state departments and institutions have been instructed to make arrangements with two or three banks.

The arrangement for transfer of funds from such bank accounts to the Consolidated Fund of the State managed by Treasury should be on ‘T+l’ or at the most, ‘T+2’ basis, between the bank and the Treasury.

All expenditure in this regard should be met from any relevant head of account of that particular department. The Department of Finance wants the cost of POS machine to be met preferably by the banks with which these departments deal with.

The circular said the organisations receiving large cash payments above Rs50 crore during a year, grant-in-aid institutions, PSUs, statutory bodies, etc. should separately invite proposals from banks for fixing MDR on POS machines for debit/credit card, and make arrangements with three or four banks.

At the same time, the organisations like Motor Vehicle Department (MVD), Kerala Water Authority (KWA), Kerala State Electricity Board Ltd (KSEBL), Kerala State Civil Supplies Corporation, Consumer Federation, KSRTC, etc. should put in place facilities for accepting payment by debit card and credit card through POS machine and Bharat QR code, BHIM, UPI and other digital means by the said time frame, the official statement said.


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