Finance Minister Nirmala Sitharaman has announced a ₹1,500 crore incentive to reduce the number of BHIM UPI transactions in India in the financial year 2024-2025.
The Indian Cabinet has launched an incentive scheme worth ₹1,500 crore to promote transactions Using BHIM UPI from 2024 to 2025
Out of 1.5 billion people in India, 75-90% of them are small businessmen in one way or another, so the Union Cabinet chaired by Prime Minister Narendra Damodar Modi has launched an incentive scheme of Rs 1,500 crore from the Government of India for the financial year 2024-25 to enable low-cost BHIM-UPI transactions in India, so that small businessmen can register and accept person-to-person (P2M) transactions, to expand India’s digital payment ecosystem.
Incentive Structure And Eligibility For The Scheme
This scheme is designed to increase business size and transaction value and to enjoy it:
- Small merchants will get a 0.15% incentive on every transaction value, called the Merchant Discount Rate, for transactions up to ₹2,000.
- This scheme is designed to increase business size and transaction value and to enjoy it: Small merchants will get a 0.15% incentive on every transaction value, called the Merchant Discount Rate, for transactions up to ₹2,000.
This focused strategy ensures that the advantages largely reach small firms, which may be hesitant to embrace digital payment systems owing to cost concerns.
What will the distribution process be like?
Some performance parameters have been included to ensure the disbursement process:
80% of the claim amount will be disbursed unconditionally by the acquiring banks.
The remaining 20% is dependent on meeting the technical performance criteria.
Only 10% will be disbursed if the acquiring banks experience less than 0.75% technical degradation.
The remaining 10% will be disbursed only when the system uptime of the acquiring banks exceeds 99.5%.
This is designed to promote digital transactions so that more people transact using BHIM UPI and the well-established digital infrastructure.
Applicability:
Only Indian Banks Are Applicable and transactions within India
The objectives of this project are many, some of which are highlighted below:
To reach 200 billion UPI transactions by FY 2024-25
To achieve a transaction target of Rs 20,000 crore by FY 2025.
To expand UPI penetration in remote rural areas
