Government Notifies Incentives For Promoting PoS, E-Commerce Transactions Using Rupay, BHIM

The government has notified a scheme to incentivise banks for promoting point-of-sale and e-commerce transactions using RuPay debit cards and low-volume payments to merchants on the BHIM-UPI platform.

The notification dated January 14, 2023 published on the Ministry of Electronics and IT website on Monday is part of an announcement in the Union Budget for 2022-23 to boost digital transactions in the country.

The government has announced the scheme to incentivise the acquiring banks by way of paying a percentage of value of RuPay debit cards transactions and low-value BHIM-UPI transactions up to Rs 2,000 (Person-to-Merchant- P2M) for the financial year 2022-23, with effect from April 1, 2022.

"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," the notification said.

For transactions using RuPay debit cards at point-of-sale (PoS) and through e-commerce, the acquiring bank will get 0.4 per cent, capped at Rs 100, incentive for low-volume transactions for other than any industry related programmes.

In case of industry programmes, the incentive will be 0.15 per cent of the low volume transaction, capped at Rs 6, done through RuPay debit cards.

Similarly, payments made to merchants using BHIM-UPI for transactions up to Rs 2,000, the acquirer bank will get 0.25 per cent of the transaction amount as incentive for other than industry programmes while 0.15 per cent incentives for industry programmes covering insurance, mutual funds, government, education, railways, agriculture and fuel, among others.

The duration of the scheme is one year with effect from April 1, 2022, the notification said.

"The financial outlay for the scheme shall be restricted to Rs 2,600 crore. To secure this, MeitY will, if required, review the merchant categories included in industry programmes. The allocation of Rs 2,600 crore will be fungible between RuPay debit cards and BHIM-UPI," the notification said.