In a major push towards accelerating digital transactions and advancing financial inclusion, the Ministry of Finance, Department of Financial Services, has introduced an incentive scheme to promote widespread adoption of digital payments, focusing on RuPay Debit Cards and low-value BHIM-UPI transactions (Person to Merchant) for the fiscal year 2023-24.
The scheme aims to incentivise banks, payment system operators, and app providers to promote transactions using RuPay Debit Cards and low-value BHIM-UPI transactions (up to Rs 2,000) on a person-to-merchant basis. The incentives, structured quarterly based on transaction values, seek to create a resilient digital payments ecosystem across diverse sectors and demographics.
With a significant financial outlay of Rs 3,500 Crore, the scheme earmarks separate provisions for RuPay Debit Cards and BHIM-UPI transactions. The incentive rates are tiered across various transaction categories, with additional provisions for industry-specific programs.
The scheme meticulously outlines reimbursement mechanisms for banks, quarterly disbursements of claims, and stringent eligibility criteria for reimbursement percentages. It also mandates specific growth targets and operational requisites for banks to qualify for full reimbursement.
Implementation guidelines
To ensure effective implementation, the Department of Financial Services, in collaboration with the National Payment Corporation of India (NPCI), will issue comprehensive operational guidelines. These guidelines will delineate the incentive-sharing mechanism, guaranteeing uniform application across eligible banks operating in India.
The genesis of the incentive scheme lies in the government’s relentless efforts to propel digital transactions throughout the nation. Despite remarkable growth in digital payments, there exists untapped potential for further expansion. The incentive scheme is a targeted initiative aimed at promoting digital payments, particularly in markets or sectors that remain underexplored.
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