Cabinet OKs INR 15 bln for FY25 low value UPI transaction incentive scheme
This story was originally published at 17:19 IST on 19 March 2025
Register to read our real-time news.Informist, Wednesday, Mar. 19, 2025
--Cabinet OKs INR-15-bln incentive for UPI
NEW DELHI – The Union Cabinet, chaired by Prime Minister Narendra Modi, Wednesday approved an incentive scheme for the promotion of low-value Bharat Interface for Money-Unified Payments Interface, or BHIM-UPI, transactions. The Cabinet approved INR 15 billion for 2024-25 (Apr-Mar) under the incentive scheme, which promotes low-value BHIM-UPI person to merchant transactions, the government said in a release.
Only Person to Merchant UPI transactions upto INR 2,000 for small merchants are covered under the scheme. An incentive rate of 0.15% per transaction value will be provided for transactions upto INR 2,000 to small merchants, the government 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 release said.
The objective of the scheme is to promote the indigenous BHIM-UPI platform and achieving 200 billion total transaction volume in FY25.
Digital payment service providers, such as credit card networks, charge a Merchant Discount Rate on transactions to make up for the expenditure incurred while providing services to customers and merchants. As per the Reserve Bank of India, Merchant Discount Rate of up to 0.90% of the transaction value is applicable across all card networks.
According to the National Payments Corporation of India, Merchant Discount Rate up to 0.30% of transaction value is applicable for UPI person to merchant transaction. Since January 2020, the Merchant Discount Rate was made zero for RuPay Debit Cards and BHIM-UPI transactions to promote digital transactions.
"In order to support the payment ecosystem participants in effective delivery of services, "Incentive scheme for promotion of RuPay Debit Cards and low-value BHIM-UPI transactions (P2M)" has been implemented with due approval by the Cabinet," the government said. In FY24, the Indian government paid INR 36.31 billion for the incentive scheme. End
Reported by Shubham Rana
Edited by Akul Nishant Akhoury
For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.
Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.
Informist Media Tel +91 (11) 4220-1000
Send comments to feedback@informistmedia.com
© Informist Media Pvt. Ltd. 2025. All rights reserved.
To read more please subscribe
Share this Story:
