Incentive scheme for promotion of RuPay Debit Cards and low-value BHIM-UPI transactions (Person to Merchant) for FY 2023-24.
The Ministry of Finance, Department of Financial Services, announced the continuation of the Incentive Scheme for the promotion of RuPay Debit Cards and low-value BHIM-UPI transactions (Person to Merchant, P2M) for the financial year 2023-24 through Notification No 9/27/2023 – FI (Part)1, dated March 12, 2024. This decision aligns with the government’s ongoing efforts to further boost digital transactions across the country. The scheme, prompted by the Budget announcement for FY 2023-24, intends to incentivize banks, payment system operators, and app providers for promoting transactions through RuPay Debit Cards and BHIM-UPI for transactions up to ₹2,000.
Key highlights of the scheme include:
- Objective: To promote digital payments in untapped markets or sectors by incentivizing the adoption of indigenously-developed digital payment methods such as RuPay Debit Cards, BHIM-UPI, BHIM-UPI Lite, LiteX, “UPI Conversational Payments- Hello! UPI”, and BHIM-UPI 123PAY.
- Incentive Details: Banks will receive incentives for facilitating transactions using RuPay Debit Cards and BHIM-UPI (up to ₹2,000). The incentive rates are differentiated between general transactions (0.40% for RuPay, capped at ₹100; 0.25% for BHIM-UPI) and industry-specific programmes (with lower rates).
- Financial Outlay: The government has allocated ₹3,500 crore for this scheme, with ₹500 crore designated for RuPay Debit Card transactions and ₹3,000 crore for BHIM-UPI transactions. The allocation between these two modes is fungible in one direction (BHIM-UPI to RuPay).
- Duration: The scheme is valid from April 1, 2023, to March 31, 2024.
- Reimbursement: Claims by banks will be reimbursed quarterly, with full reimbursement for the first three quarters and reduced percentages in the fourth quarter, contingent on fulfilling certain growth and feature enablement conditions.
- Operational Guidelines: The Department of Financial Services (DFS), in consultation with the National Payments Corporation of India (NPCI), will issue detailed operational guidelines for implementing the scheme and will oversee the incentive sharing mechanism.
- Applicability: The scheme is applicable to banks operating in India, focusing on transactions done within the country.
Through this initiative, the government aims to foster a more robust digital payment ecosystem and encourage the broader adoption of secure, efficient, and cost-effective digital payment methods among all sectors of the population.
The Complete notification can be accessed at: https://www.a2ztaxcorp.com/wp-content/uploads/2024/03/Incentive-scheme-for-promotion-of-RuPay-Debit-Cards-and-low-value.pdf