The Union Cabinet under the leadership of PM Nardenra Modi, has approved an incentive scheme wroth Rs 1500 core for promoting low-value BHIM-UPI transactin. The purpose of this initiative is to encourage digital payment among the small merchants and improve the financial inclusion nationwide.
As per the scheme, UPI transactions of up to Rs 2,000 made at small businesses will be incentivized to ensure that they can accept digital p[payments without paying any additional cost. Conversely, large merchants will not be getting any incentive for such transactions.
As per the scheme, an incentive of 0.15% per transaction value will be provided for transactions up to Rs. 2,000 for small merchants. As per the official release, it will facilitate convenient, secure, and faster cash flow and provide enhanced access to credit through digital transactions. This initiative is going to benefit the common man with seamless payment facilities without any additional changes.
Since small merchants are price-sensitive, this incentive will empower them to receive UPI payments.
In every quarter of the program, 80% of the approved claims amount from the acquiring banks will be distributed unconditionally. But the 20% of the remaining approved claim amount for each quarter will be provided under the following conditions:
10% of the approved claims will be disbursed if the technical decline of the acquiring banks is lower than 0.75%.
The rest 10% of the approved claims will be disbursed if the system uptime fo the acquiring bank exceeds 99.5%.
The scheme ultimately focuses on achieving a cumulative UPI transaction value of Rs 20,000 crore by 2024-25. Since 2020, the Indian government is actively promoting digital transactions. In the last three year, the govnemrent has given incentive of over Rs 7000 to banks and payment services for promoting digital transactions.
