UPI Gets a Boost! ₹1,500 Cr Incentive to Power Small Payments

The Union Cabinet has approved a ₹1,500 crore incentive scheme to promote low-value BHIM-UPI transactions (up to ₹2,000) among small traders during FY 2024-25. The scheme will be implemented from April 1, 2024, to March 31, 2025, and will target enhancing digital payments and reducing dependence on...

The Union Cabinet has approved a ₹1,500 crore incentive scheme to promote low-value BHIM-UPI transactions (up to ₹2,000) among small traders during FY 2024-25. The scheme will be implemented from April 1, 2024, to March 31, 2025, and will target enhancing digital payments and reducing dependence on cash. Small traders will be rewarded with a 0.15% incentive on each transaction under the plan. For instance, a payment of ₹1,000 through UPI will pay a merchant ₹1.50. This opportunity is not extended to large merchants. The acquiring banks too will be compensated 80% of their claims in advance every quarter and the balance 20% will be tied to performance parameters like system uptime (99.5%) and low technical decline rates (below 0.75%). This will more than likely lead to UPI adoption in rural India through innovations like UPI Lite and UPI 123PAY. Source: India Today, Economic Times