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The Union Cabinet on Wednesday approved an incentive scheme worth ₹ 1,300 crore to promote RuPay Debit Cards and low-value (up to ₹2,000) BHIM-UPI transactions (person to merchants-P2M) in the country.
Under the scheme, the acquiring banks will be incentivised by the Government by paying a percentage of the value of transactions (P2M) done through RuPay Debit cards and low-value BHIM-UPI modes of payments, at an estimated financial outlay of ₹1,300 crore for one year w.e.f. April 01, 2021.
The scheme has been formulated in compliance with the Budget announcements (FY 2021-22) by the Government to further boost digital transactions in the country.
"Government will invest ₹ 1,300 crore so that more Indians can move into the digital fold throughBHIM-UPI and RuPay Debit cards," Ashwini Vaishnaw, Union Minister of Railways, Communications and Electronics & Information Technology, told reporters after a Cabinet meeting here.
In November this year, India saw a record number of digital transactions at 423 crore valued at ₹ 7.56 lakh crore (nearly $ 100 billion), Vaishnaw said.
This is the level of digital payments that India has accepted, and today's Cabinet decision will further accelerate the adoption, he added.
This scheme will facilitate acquiring banks to build a robust digital payment ecosystem and promote RuPay Debit card and BHIM-UPI digital transactions across all sectors and segments of the population, and further deepening digital payments in the country.
It will also help make accessible digital modes of payments to unbanked and marginalised populations outside of the formal banking and financial system.
Industry view
Vishwas Patel, Chairman, Payments Council of India and Director, Infibeam Avenues, said, “PCIwhole heartedly welcomes the cabinet decision on the incentive scheme for Rupay Debit Cards and UPI. Post Demonetization in 2016, we have seen a leap toward digital transactions, with Rupay cards increasing in user acceptance across the country, especially across rural areas where paying with a card was a novelty a few years back. Whether person-to-person or person-to-merchant, UPI has made digital payments simple and accessible to all. This decision to incentivise the small value transactions on UPI and Rupay Debit will go a long way in further building robust digital payment ecosystems and accelerate the vision of a ‘less-cash society.”
“The industry has had its share of problems since the announcement of ZERO MDR, but they will greatly benefit from this initiative of reimbursement of transaction charges levied on digital payments, which will help them to scale up payments infrastructure in the country, thereby enhancing financial inclusion," he added.
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