Govt approves Rs 1,500 cr incentive for promotion of small-value UPI payments

The government on Wednesday approved a Rs 1500 crore incentive for the promotion of smallvalue BHIMUPI P2M transactions up to Rs 2000 a move aimed at benefiting common people and small merchantsThe Incentive Scheme for promotion of lowvalue BHIMUPI transactions Person to Merchant P2M for the financial year 202425 was approved by the Cabinet chaired by Prime Minister Narendra Modi Information and Broadcasting Minister Ashwini Vaishnaw told reporters hereIn a post on social media platform X the Prime Minister said The incentive scheme on promoting lowvalue UPI transactions which has been approved by the Cabinet today will encourage digital payments and further Ease of LivingThe scheme will cover 55 per cent of the total merchant transactions an official release saidAn incentive at the rate of 015 per cent per transaction value will be provided for transactions up to Rs 2000 pertaining to the category of small merchantsFor all the quarters of the scheme 80 per cent of the admitted claim amount by the acquiring banks will be disbursed without any conditionsThe reimbursement of the remaining 20 per cent of the admitted claim amount for each quarter will be contingent upon the fulfilment of certain conditionsThe incentive will enable small merchants to avail of UPI services at no additional costAs small merchants are pricesensitive incentives would encourage them to accept UPI payment the release saidThe promotion of digital payments is an integral part of the governments strategy for financial inclusion and provides wideranging payment options to the common manVaishnaw also informed that UPI services are also available in Singapore France UAE Sri Lanka Bhutan Nepal and MauritiusUPI Unified Payments Interface is an instant realtime payment system developed by NPCI to facilitate interbank transactions through mobile phonesDuring the last financial year incentive payouts by the government for BHIMUPI were Rs 3268 croreThe incentive is paid by the government to the acquiring bank Merchants bank and thereafter shared among other stakeholders Issuer Bank Customers Bank Payment Service Provider Bank facilitates onboarding of customers on UPI app API integrations and App Providers TPAPsAs per the RBI MDR up to 090 per cent of transaction value is applicable across all card networks for Debit cardsAccording to NPCI MDR up to 030 per cent of transaction value is applicable for UPI P2M transactionsSince January 2020 to promote digital transactions MDR was made zero for RuPay Debit Cards and BHIMUPI transactions through amendments in section 10A in the Payments and Settlement Systems Act 2007 and section 269SU of the Incometax Act 1961This story has been sourced from a third party syndicated feed agencies Midday accepts no responsibility or liability for its dependability trustworthiness reliability and data of the text Midday managementmiddaycom reserves the sole right to alter delete or remove without notice the content in its absolute discretion for any reason whatsoever