The Union Cabinet today unveiled steps to promote electronic payments, including a direction to abolish payment of any surcharge or service charge on transactions done through the digital medium -- either through cards or wallets.

The move is the latest by the government to discourage cash payments and encourage more people to move to electronic payments.

The Cabinet release outlined several short (to be implemented within a year) and medium (to be implemented in two years) term targets that will be met by various ministries towards pushing more electronic payments in the country.



"This is a masterstroke by the government following last year's [RBI] decision to roll out payment banks," said Paytm Founder Vijay Shekhar Sharma.



He added that the current regime, in which companies levied charges on digital payments was lopsided -- and in favour of cash.



"This will force companies to not levy additional charges. It should not cost more when you're paying digital," Sharma said.



The release also says the government will mandate use of digital payments in transactions that are above a certain threshold.



"This is a way for consumers to learn digital," Sharma said.