Exciting News for Digital Payments: The New BHIM-UPI Incentive Scheme!
The Union Cabinet, led by Prime Minister Narendra Modi, has just approved an incredible Incentive Scheme for promoting low-value BHIM-UPI transactions (Person to Merchant – P2M) for the financial year 2024-25. This initiative is set to revolutionize digital payments, especially for small merchants, by focusing on the indigenous and widely trusted BHIM-UPI platform.
- Timeline: April 1, 2024, to March 31, 2025
- Budget: ₹1,500 crore
- Target: Facilitate UPI P2M transactions up to ₹2,000 for small merchants
Key Features and Benefits
The scheme eliminates the Merchant Discount Rate (MDR) for specific transactions while providing attractive incentives. This is designed to lower costs for small merchants and encourage banks to maintain efficient systems.
- Scope: Only small merchants for transactions up to ₹2,000
- Incentive: 0.15% on each transaction value for small merchants
How It Works
Here’s a quick breakdown:
- Small Merchants: Zero MDR + 0.15% incentive for transactions up to ₹2,000; Zero MDR with no incentive for transactions above ₹2,000.
- Large Merchants: Zero MDR with no incentive for all amounts.
Benefits for Everyone
This initiative promises faster, secure payments with zero extra charges for citizens and free UPI access along with incentives for small merchants. Additionally, it supports a less-cash economy, paving the way for quicker cash flow and better access to credit.
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Background and Future Goals
This new scheme is part of a broader strategy to promote financial inclusion in India, aiming for a staggering total volume of ₹20,000 crore in UPI transactions for 2024-25. With a focus on expanding UPI’s reach, especially in rural areas, this initiative stands to transform the way we transact.
Stay tuned and get ready to embrace the future of payments!
