New Incentive Scheme Boosts BHIM-UPI Transactions for Small Merchants

The Indian government approved a Rs 1,500 crore incentive scheme to promote small-value BHIM-UPI transactions. This initiative aims to boost digital payments and ease of living, benefiting small merchants through a 0.15% transaction value incentive. UPI usage is expanding internationally, with zero MDR for certain transactions.

The Indian government has rolled out a hefty Rs 1,500 crore incentive to push the adoption of small-value BHIM-UPI transactions. Announced by Prime Minister Narendra Modi's cabinet, the move is aimed at offering financial relief to everyday users and small-business owners, catalyzing the digital payment revolution.

As outlined by Information and Broadcasting Minister Ashwini Vaishnaw, the program targets transactions up to Rs 2,000, while covering 55% of all P2M transactions. Acquiring banks stand to receive an incentive of 0.15% per transaction, thereby making UPI services more accessible, especially for price-conscious merchants.

The scheme underscores India's broader strategy of financial inclusion via digital means. UPI services have already transcended national borders, available in countries like Singapore and the UAE. In the previous fiscal year, the government attributed Rs 3,268 crore towards similar incentives, reinforcing its commitment to a cashless economy.

(With inputs from agencies.)