Cabinet approves incentive schemes to promote Rupay debit cards, low value BHIM-UPI transactions.
On Wednesday, the Union Cabinet chaired by Prime Minister Narendra Modi, approved a rupees of 2600 crore incentive scheme to promote RuPay Debit Cards and low-value BHIM-UPI transactions (person-to-merchant) is for a period of one Financial Year, i.e., from April 2022-2023.
Under this scheme, acquiring banks will be provided financial incentive, for promoting Point-of-Sale (PoS) and e-commerce transactions using RuPay Debit Cards and low-value BHIM-UPI transactional, an official press release stated.
Last year, the Union Finance Minister Nirmala Sitharaman in her Budget speech had announced the government’s intent to continue the financial support for digital payments announced in the previous Budget, with a focus on promoting use of payment platforms that are economical and user-friendly.
As a result of the scheme, total digital payments transactions have registered a year-on-year growth of 59 per cent, rising from Rs 5,554 crore in FY21 to Rs 8,840 crore in FY22. Meanwhile, UPI transactions have registered a year-on-year growth of 106 per cent, rising from Rs 2,233 crore in FY21 to Rs 4,597 crore in FY22.
"This incentive scheme will facilitate building of a robust digital payment ecosystem and promoting RuPay Debit Card and BHIM-UPI digital transactions. In-line with the objective of ‘Sabka Saath, Sabka Vikas’, the scheme will also promote UPI Lite and UPI 123PAY as economical and user-friendly digital payments solutions and enable further deepening of digital payments in the country, across all sectors and segments of the population, " the release further stated.
Vishwas Patel, Chairman, PCI and Executive Director, Infibeam Avenues, talking about the Union Cabinet decision said, "This will further provide momentum to the payment service operators to improve the infrastructure at the last mile in the deep corners of our country and, will help in creating a robust digital payment ecosystem. The government should also ensure that the benefit is reaching the last leg of the value chain i.e. Payment aggregators."
The government said that the exponential expansion of digital payment transactions over time has facilitated the operation of businesses, even small shops, and also maintained social distance throughout the Covid-19 crisis.