A significant boost for digital payments! The Cabinet has approved a Rs 1,300-crore scheme to promote UPI and Rupay

New Delhi:  The Union Cabinet approved a Rs 1,300-crore incentive scheme to promote transactions made via UPI and Rupay debit cards on Wednesday (December 15), providing a significant boost to digital payments.

The recently approved scheme was developed in accordance with Finance Minister Nirmala Sitharman’s Budget announcements (FY2021-22). The scheme aims to increase the number of digital transactions in the country.

On Wednesday, Ashwini Vaishnav, Minister of Electronics and Information Technology, announced the government’s decision. He stated that as part of the merchant discount rate, the government will reimburse transaction fees levied on digital payments made by individuals to merchants (MDR).

“Over the next year…the government will invest around Rs 1,300 crore to encourage more people to use digital payments,” Vaishnav said. The scheme will reimburse up to Rs 2,000 in digital transactions made with Rupay debit cards and BHIM-UPI.

“Under the scheme, the government will incentivize acquiring banks by paying a percentage of the value of transactions (P2M) done through RuPay Debit cards and low-value BHIM-UPI modes of payment, at an estimated financial outlay of Rs 1,300 crore for a one-year period beginning April 1, 2021,” an official statement said.

According to the statement, the scheme will help to acquire banks build a strong digital payment ecosystem by promoting Rupay debit card and BHIM-UPI digital transactions across all sectors and segments of the population, as well as further deepening digital payments in the country.

In November, 423 crore digital transactions worth Rs 7.56 lakh crore were processed in India, according to the minister.

 

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