The Union Cabinet on Wednesday approved a Rs 2,600 crore incentive scheme to promote RuPay debit cards and low-value transactions done through BHIM-UPI platform.
This incentive scheme is for a period of one year from April 2022. This is in line with the announcement made by Finance Minister Nirmala Sitharaman in the Union Budget presented in February 2022. In her Budget speech for FY 2022-23, the finance minister announced that the government would continue to provide financial support for digital payments.
The incentive scheme was first announced in the Union Budget for the financial year 2021-22 presented in February 2021. The scheme is aimed to promote the use of payment platforms that are economical and user-friendly.
Addressing a media briefing after the cabinet meeting, Union Minister Bhupender Yadav said the scheme is aimed to give a further boost to the digital payments system in the country.
The approved incentive scheme for the promotion of RuPay debit cards and low-value BHIM-UPI transactions (person-to-merchant) has a financial outlay of Rs 2,600 crore. Under this 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 for the current financial year.
RuPay debit cards and BHIM-UPI platform is run by the government-owned National Payments Corporation of India (NPCI). BHIM is a mobile payment app based on the Unified Payments Interface (UPI).
This incentive scheme will facilitate building of a robust digital payment ecosystem and promote RuPay debit card and BHIM-UPI digital transactions. The scheme will also promote UPI Lite and UPI 123PAY as economical and user-friendly digital payment solutions and enable further deepening of digital payments in the country, across all sectors and segments of the population, according to an official statement released after the cabinet meeting.
According to the government statement, the incentive has helped boost digital transactions. The total digital payment transactions have registered a year-on-year growth of 59 per cent, rising from 5,554 crore in the financial year 2020-21 to 8,840 crore in the financial year 2021-22. BHIM-UPI transactions have registered a year-on-year growth of 106 per cent, rising from 2,233 crore in the financial year 2020-21 to 4,597 crore in the financial year 2021-22.