BENGALURU: The Union Cabinet on Wednesday approved the Rs 1,500-crore incentive scheme to promote BHIM-UPI transactions below Rs 2,000 for financial year 2024-25.
The incentive will be provided at the rate of 0.15% per transaction value for transactions up to Rs 2,000 pertaining to the category of small merchants, an official statement said.
For all the quarters of the scheme, 80% of the admitted claim amount by the acquiring banks will be disbursed without any conditions. The 10% of the admitted claim will be provided only when the technical decline of the acquiring bank will be less than 0.75%; and the remaining 10% will be provided only when the system uptime of the acquiring bank will be greater than 99.5%, the statement added.
It further said the objective is to promote the indigenous BHIM-UPI platform and to achieve the target of 20,000 crore total transaction volume in FY 2024-25. The objective also includes penetration of UPI in tier 3 to 6 cities, especially in rural & remote areas by promoting innovative products such as feature phone-based (UPI 123PAY) and offline (UPI Lite/UPI LiteX) payment solutions.
The move will ensure convenient, secure, faster cash flow, and enhanced access to credit through digital footprints.
Ramakrishnan Ramamurthy, Chief Delivery and Operations Officer – India, Worldline said one of the key challenges in promoting digital payments, particularly in tier-3 and beyond, is the high cost of setting up the necessary payment infrastructure.
"The proposed incentive aims to address this by both enabling wider adoption and subsidising the cost of payment systems. Additionally, the government’s investment aligns with the broader vision of boosting digital payments while reducing the reliance on the cash economy," he added.