The Union Cabinet on Wednesday, December 15, approved a Rs 1,300-crore incentive scheme to promote digital transactions using UPI and Rupay debit cards, Electronics and IT Minister Ashwini Vaishnaw said. The Minister said that the government will reimburse transaction charges levied on digital payments made by persons to the merchant as part of the merchant discount rate (MDR).
"In the coming one year...the government will invest around Rs 1,300 crore so that more and more people move towards digital payments," Vaishnaw said. He also said that 423 crore digital transactions valued at Rs 7.56 lakh crore took place in November. The approved scheme will cover reimbursement on digital transactions of up to Rs 2,000, using Rupay debit cards and BHIM-UPI.
"Under the scheme, the acquiring banks will be incentivised by the government, by way of paying a percentage of the value of transactions (P2M or person to merchant) done through RuPay Debit cards and low-value BHIM-UPI modes of payments, at an estimated financial outlay of Rs 1,300 crore for a period of one-year w.e.f. April 01, 2021," an official statement said.
This scheme will facilitate acquiring banks in building a robust digital payment ecosystem and promoting Rupay debit card and BHIM-UPI digital transactions across all sectors and segments of the population and further deepening digital payments in the country, it added.
The scheme was formulated in compliance with the Budget announcements (FY 2021-22) by the government to give a further boost to digital transactions in the country.