New Delhi: The Union Cabinet, chaired by Prime Minister Narendra Modi, on Wednesday approved the incentive scheme for low-value BHIM-UPI transactions with an estimated outlay of Rs 1,500 crore.
The aim is to achieve the target of 20,000 crore total transaction volume in FY 2024-25, via the indigenous BHIM-UPI platform.
The incentive scheme for promotion of low-value BHIM-UPI transactions (person to merchant) “will be implemented at an estimated outlay of 1,500 crore, from 01.04.2024 to 31.03.2025”, said the Cabinet.
Only the UPI (P2M) transactions up to Rs 2,000 for small merchants are covered under the scheme, it added.
The incentive at the rate of 0.15 per cent per transaction value will be provided for transactions up to Rs.2,000 pertaining to the category of small merchants.
“For all the quarters of the scheme, 80 per cent of the admitted claim amount by the acquiring banks will be disbursed without any conditions,” according to the Cabinet note.
The reimbursement of the remaining 20 per cent of the admitted claim amount for each quarter will be contingent upon the fulfilment of the following conditions – 0 per cent of the admitted claim will be provided only when the technical decline of the acquiring bank will be less than 0.75 per cent, and the remaining 10 per cent of the admitted claim will be provided only when the system uptime of the acquiring bank will be greater than 99.5 per cent, the Cabinet informed.
The move will ensure convenient, secure and faster cash flow, and common citizens will benefit from seamless payment facilities with no additional charges.
This will also enable small merchants to avail of UPI services at no additional cost. As small merchants are price-sensitive, incentives would encourage them to accept UPI payments.
The 20 per cent incentive is contingent upon banks maintaining high system uptime and low technical decline. This will ensure round-the-clock availability of payment services to citizens.
As per the RBI, merchant discount rate (MDR) up to 0.90 per cent of transaction value is applicable across all card networks (for Debit cards).
As per the NPCI, MDR up to 0.30 per cent of transaction value is applicable for UPI P2M transactions. Since January 2020, to promote digital transactions, MDR was made zero for RuPay Debit Cards and BHIM-UPI transactions.
(IANS)
