Big boost for digital payments! Cabinet approves Rs 1,300-crore scheme to promote UPI, Rupay

The Union Cabinet has approved a Rs 1,300-crore incentive scheme to promote transactions made via UPI and Rupay debit cards.

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

The recently approved scheme was formulated in compliance with the Budget announcements (FY2021-22) by Finance Minister Nirmala Sitharman. The scheme aims to give a further boost to digital transactions in the country. 

Electronics and IT Minister Ashwini Vaishnaw announced the government’s decision on Wednesday. He 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. The 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) 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.

The statement added that the 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. Also Read: Shriram Properties IPO share allotment today: Check allotment status, latest GMP, expected listing price

The minister also informed that in November, 423 crore digital transactions valued at Rs 7.56 lakh crore were processed in India. Also Read: Markets extend losses for fourth day as Fed decision looms