NEW DELHI: The Union Cabinet on Wednesday approved the incentive scheme for promotion of RuPay debit cards and low-value BHIM-UPI transactions (person-to-merchant) for a period of one year from April 2022.
The approved incentive scheme in 2022-23 has a financial outlay of Rs 2,600 crore.
Under the scheme, acquiring banks will be provided financial incentives for promoting Point-of-Sale (PoS) and e-commerce transactions using RuPay Debit Cards and low-value BHIM-UPI transactions (P2M) for the current financial year.
In 2021-22, the government had approved an incentive scheme in compliance with the budget announcement of 2021-22 to give a further boost to digital transactions.
As a result, total digital payments transactions have registered a year-on-year growth of 59 per cent, rising from 5,554 crore in l2020-21 to 8,840 crore in 2021-22.
BHIM-UPI transactions have registered a year-on-year growth of 106 per cent, rising from 2,233 crore in 2020-21 to 4,597 crore in 2021-22.
Various stakeholder in the digital payments systems and the Reserve Bank of India (RBI) expressed concerns regarding potential adverse impact of the zero MDR regime on the growth of the digital payments ecosystem.
Further, the National Payments Corporation of India (NPCI) requested, among other things, for incentivisation of BHIM-UPI and RuPay Debit Card transactions to create a cost-effective value proposition for ecosystem stakeholders, increase merchant acceptance footprints and faster migration from cash payments to digital payments.
This incentive scheme will facilitate building of a robust digital payment ecosystem and promoting RuPay Debit Card and BHIM-UPI digital transactions, official sources said.