The Union Cabinet, chaired by the Prime Minister Narendra Modi, on Wednesday (15 December) approved an incentive scheme to promote RuPayDebit cards and low-value BHIM-UPI transactions (Person-to-Merchant (P2M)] in the country.

Under the scheme, the acquiring banks will be incentivised by the Government, by way of paying percentage of value of transactions (P2M) done through RuPay Debit cards and low-value (up to Rs 2,000) BHIM-UPI modes of payments, at an estimated financial outlay of Rs 1,300 crore for a period of one year with effect from 1 April 2021, said an official release.

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

It will also help in making accessible digital modes of payments to unbanked and marginalized populations, who are outside of the formal banking and financial system, the release said.

The scheme has been formulated in compliance with the Budget announcements (FY 2021-22) by the Government to give further boost to digital transactions in the country, it added.

The scheme will further spur research and development and innovation in fintech space, and will help the government in further deepening of digital payments in various part of countries.