Government rolls out Incentive scheme for promotion of RuPay Debit Cards and low-value BHIM-UPI transactions (P2M)
The Ministry of Electronics and Information Technology (“Meity”) has issued a notification on “Incentive scheme for promotion of RuPay Debit Cards and low-value BHIM-UPI transactions (P2M)” (“Scheme”).
Background:
Although there has been an unprecedented growth in digital payments over the past few years, there is potential for further growth. It is, therefore, important to boost the adoption of digital payments, targeting untapped markets/ segments/ sectors. In compliance with the Budget announcement (FY2022-23) and to give further boost to digital transactions in the country, it has been decided by the Government to incentivize the acquiring Banks by way of paying a percentage of value of RuPay Debit Cards transactions and low-value BHIM-UPI transactions (upto ₹ 2,000) (Person-to-Merchant- P2M), for financial year 2022-23,with effect from April 01, 2022.
Key Takeaways of the Scheme:
1. The duration of the scheme is one year i.e. FY2022-23, with effect from 1st April, 2022.
2. This incentive scheme will promote digital payments by incentivising banks to build a robust digital payments ecosystem and to promote RuPay Debit Cards and BHIM-UPI as low-cost digital payments mode across all sectors and segments of population. In line with the Budget announcement, the scheme will also promote UPI Lite and UPI 123PAY as economical and user-friendly digital payments solutions.
3. The scheme will provide financial incentive to acquiring banks for promoting point-of-sale (PoS) and e-commerce transactions using RuPay Debit Cards and person-to-merchant (P2M) transactions of low value (i.e., up to ₹ 2,000) on the BHIM-UPI platform for the following categories:
• Transactions using RuPay Debit Cards at point-of-sale (PoS) and through e-commerce
• BHIM-UPI P2M transactions of up to ₹ 2,000
4. Reimbursement of claims of banks will be done on a quarterly basis, to the following extent:
• For the first, second and third quarters of the scheme, 90% of the admitted claim amount for the bank;
• For the fourth quarter of the scheme, 80% of the admitted claim amount for the bank:
Provided that the reimbursement of the remaining percentage of the admitted claim amount for each quarter will be contingent upon fulfilment of the conditions mentioned below.
5. For being eligible to receive the remaining percentage of the admitted claim amount under the proviso mentioned above, banks will be required to fulfil the following conditions:
• In order to be eligible for reimbursement of 10% of the remaining admitted claim, the bank will show at least 10% YoY growth in the number of RuPay Debit Cards transactions (PoS and e-commerce transactions) and 70% YoY growth in the number of BHIM-UPI P2M transactions at the end of the last quarter of the scheme.
• In order to be eligible for reimbursement of 10% of the remaining admitted claim for the fourth quarter, the bank will enable the features of UPI Lite and UPI 123PAY on the existing BHIM-UPI platform and will show at least 2% of BHIM-UPI P2M transactions on UPI Lite during the last quarter of the scheme.
6. The incentive will be shared by the acquiring banks with other payment system participants and the payment system operator, in the proportion and manner decided by NPCI in consultation with the participating banks.
Please note, the Scheme is applicable to the Banks having operations in India and transactions done in India.
