The Cabinet has approved a Rs 2,600 crore incentive scheme to promote Rupay debit cards and low-value UPI payments
The scheme's benefits include "creating a robust digital payment ecosystem" and "promoting UPI Lite and UPI 123Pay as cheap and user-friendly digital payment choices," according to the government.
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On January 11, the Union Cabinet approved a Rs 2,600 crore incentive scheme targeted at increasing low-value transactions over the Unified Payments Interface (UPI) and promoting Rupay debit cards.
The programme, with a total financial investment of Rs 2,600 crore, has been authorised for the fiscal year 2022-23, according to a government press release. Union Minister Bhupendra Yadav informed reporters that incentives will be provided for the adoption of Rupay debit cards and low-value BHIM-UPI transactions between individuals and merchants.
Under the scheme, "the acquiring banks would be offered financial incentive for encouraging point-of-sale (PoS) and e-commerce transactions for current FY2022-23", a release published by the government noted.
The scheme's benefits include "creating a robust digital payment ecosystem" and "promoting UPI Lite and UPI 123Pay as cheap and user-friendly digital payment choices," according to the statement.
According to the government, the National Payments Corporation of India (NPCI) — the nodal body for digital payments and settlement systems - had requested "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".
The initiative also aligns with Finance Minister Nirmala Sitharaman's remark in her most recent Budget speech, which reaffirmed the government's intention to "maintain financial support for digital payments," according to the release.
According to the government, digital payment transactions are gaining traction in the country, with the UPI achieving a record of 782.9 crore digital payment transactions worth Rs 12.82 lakh crore in the month of December 2022.
Total digital payments transactions increased by 59 percent year on year, growing from 5,554 crore in FY2020-21 to 8,840 crore in FY2021-22, it added, adding that BHIM-UPI transactions increased by 106 percent year on year, rising from 2,233 crore in FY2020-21 to 4,597 crore in FY2021-22.
