Incentive Scheme for Promotion of RuPay Debit Cards and Low-Value BHIM-UPI Transactions (P2M)

Incentive Scheme for Promotion of RuPay Debit Cards and Low-Value BHIM-UPI Transactions (P2M)

Part of: Prelims and GS III – Economy

Context The Union Cabinet has approved an incentive scheme worth ₹ 1,300 crore to promote RuPay Debit cards and low-value (upto Rs. 2,000) BHIM-UPI transactions (Person-to-Merchant (P2M)] in the country.

Key takeaways 

• Under the scheme, the acquiring banks will be incentivised by the Government, by paying percentage of value of transactions (P2M) done through RuPay Debit cards and low-value BHIM-UPI modes of payments, for a period of one year (w.e.f. April 01, 2021).
• Significance: 
  • Facilitate acquiring Banks in building a robust digital payment ecosystem 
  • Promote RuPay Debit card and BHIM-UPI digital transactions, across all sectors and segments of the population 
  • Deepen the digital payments in the country.
  • Help in making accessible digital modes of payments to unbanked and marginalized populations, who are outside of the formal banking and financial system.
• Background: The scheme has been formulated in compliance with the Budget announcements (FY 2021-22) by the Government to give further boost to digital transactions in the country.