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(GIST OF YOJANA) Cabinet approves Incentive scheme for promotion of low-value BHIM-UPI transactions (P2M)
GIST OF YOJANA : Cabinet approves Incentive scheme for promotion of low-value BHIM-UPI transactions (P2M)
APRIL-2025
Cabinet approves Incentive scheme for promotion of low-value BHIM-UPI transactions (P2M)
The Union Cabinet approved Incentive scheme for promotion of low-value BHIM-UPI transactions Person to Merchant (P2M)’ for the financial year 2024-25 in the following manner:
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The incentive scheme for promotion of low-value BHIM-UPI transactions (P2M) will be implemented at an estimated outlay of Rs 1,500 crore, from 01.04.2024 to 31.03.2025.
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Only the UPI (P2MJ transactions up to Rs 2,000 for Small Merchants are covered under the scheme. Incentive at the rate of 0.15% per transaction value will be provided for transactions upto Rs 2,000 pertaining to category of small merchants.
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For all the quarters of the scheme, 80% of the admitted claim amount by the acquiring banks will be disbursed without any conditions.
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The reimbursement of the remaining 20% of the admitted claim amount for each quarter will be contingent upon fulfilment of the following conditions:
a) 10% of the admitted claim will be provided only when the technical decline of the acquiring bank will be less than 0.75%; and
b) The remaining 10% of the admitted claim will be provided only when the system uptime of the acquiring bank will be greater than 99.5%.
Benefits
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Convenient, secure, faster cash flow, and enhanced access to credit through digital footprints.
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Common citizens will benefit from seamless payment facilities with no additional charges.
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Enable small merchants to avail of UPI services at no additional cost. As small merchants are price-sensitive, incentives could encourage them to accept UPI payment
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Supports the Government's vision of a less-cash economy through formalising and accounting the transaction in digital form.
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Efficiency gain- 20% incentive is contingent upon banks maintaining high system uptime and low technical decline. This will ensure round-the-clock availability of payment services to citizens.
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Judicious balance of both the grov/th of UPI transactions and the minimum financial burden on the Government exchequer.
Objective
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Promotion of indigenous BHIM-UPI platform. Achieving the target of 20,000 crore total transaction volume in FY 2024-25.
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Supporting the payment system participants in building a robust and secure digital payment: infrastructure.
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Penetration of UPI in tier 3 to 6 cities, especially in rural & remote areas by promoting innovative products such as feature phone based (UPI 122: & offline (UPI Lite/UPI LiteX) payment solutions.
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Maintain a high system uptime & mini technical declines.
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