Cabinet approves incentive plan to promote digital payments

Cabinet approves incentive plan to promote digital payments

The coalition cabinet has approved a plan to encourage digital transactions

New Delhi:

Aiming to promote digital transactions and incentivize users with Rupay debit cards and the BHIM unified payment interface (UPI) system, the union cabinet on Wednesday approved a chargeback of Rs 1,300 crore for those transactions.

Further detailing the cabinet’s decision, IT and Electronics Minister Ashwini Vaishnaw told the media that the government would refund transaction fees for digital payments that were not made. those made to the seller as part of the seller discount rate (MDR).

“In the next one year, the government will invest around Rs 1,300 crore to get more and more people to switch to digital payments,” Mr. Vaishnaw said.

He also said that 423 crore digital transactions worth Rs 7.56 lakh took place in November 2021 alone.

Under the plan, acquiring banks will be incentivized by the government, by paying a percentage of the value of transactions (P2M) made through the RuPay debit card and the low-value BHIM-UPI payment method, with an estimated financing cost of Rs 1,300 crore for a period of one year, effective April 1, 2021.

This scheme will facilitate the acquiring banks in building a strong digital payment ecosystem and promote the RuPay Debit card and BHIM-UPI digital transactions, across all sectors and segments of the population and further develop digital payments in the country.

It will also help make digital payment methods accessible to unbanked and marginalized sections of the population who are not part of the formal banking and financial systems, sources said. officially said. Cabinet approves incentive plan to promote digital payments

Emma James

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