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Union Cabinet approves Rs 1,300 cr incentive scheme to promote UPI, RuPay debit card transactions

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Union Cabinet approves Rs 1,300 cr incentive scheme to promote UPI, RuPay debit card transactions

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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 BHIM-UPI modes of payments, at an estimated financial outlay of Rs 1,300 crore for a period of one year with effective from April 1, 2021.

Union Cabinet approves Rs 1,300 cr incentive scheme to promote UPI, RuPay debit card transactions
The Union Cabinet on Wednesday approved Rs 1,300 crore incentive scheme to promote digital transactions using UPI and RuPay debit cards. Electronics and IT Minister Ashwini Vaishnaw said that the government will reimburse transaction charges levied on digital payments made by persons to the merchant as part of the merchant discount rate (MDR).
"In the coming one year...the government will invest around Rs 1,300 crore so that more and more people move towards digital payments," Vaishnaw said. He also said that 423 crore digital transactions valued at Rs 7.56 lakh crore took place in November. The approved scheme will cover reimbursement on digital transactions of up to Rs 2,000, using RuPay debit cards and BHIM-UPI.
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 BHIM-UPI modes of payments, at an estimated financial outlay of Rs 1,300 crore for a period of one year with effective from April 1, 2021.
This scheme will facilitate acquiring Banks in building a 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.
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It will also help in making accessible digital modes of payments to unbanked and marginalised populations, who are outside of the formal banking and financial system.
The scheme will further spur research and development and innovation in the fintech space and will help the government in further deepening digital payments in various parts of countries.
The scheme was formulated in compliance with the Budget announcements (FY2021-22) by the government to give a further boost to digital transactions in the country.
(With inputs from agencies)
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