What is the estimated outlay for the ‘Incentive Scheme for promoting low-value BHIM-UPI transactions (P2M)’ for 2024-25?

The correct answer is ₹1,500 crore.

In News

• The Union Cabinet has approved the ‘Incentive Scheme for promotion of low-value BHIM-UPI transactions (P2M)’ for the financial year 2024-25.
• The scheme will be implemented with an estimated outlay of ₹1,500 crore.

Key Points

• The scheme covers UPI (P2M) transactions up to ₹2,000 for small merchants.
• Incentive at the rate of 0.15% per transaction value will be provided for transactions up to ₹2,000.
• ₹1,500 crore has been allocated for the financial year 2024-25.
• The incentive will be paid by the government to acquiring banks, which will then distribute it among other stakeholders.

Additional Information

• MDR and Digital Transactions
  • MDR (Merchant Discount Rate) for UPI transactions up to ₹2,000 was made zero to promote digital payments.
  • RBI permits an MDR of up to 0.90% for debit cards and up to 0.30% for UPI P2M transactions.
• Year-wise Incentive Payout by the Government
  • FY 2021-22: ₹1,389 crore (₹432 crore for RuPay Debit Card, ₹957 crore for BHIM-UPI)
  • FY 2022-23: ₹2,210 crore (₹408 crore for RuPay Debit Card, ₹1,802 crore for BHIM-UPI)
  • FY 2023-24: ₹3,631 crore (₹363 crore for RuPay Debit Card, ₹3,268 crore for BHIM-UPI)
• Key Objectives of the Scheme
  • Promote BHIM-UPI adoption among small merchants.
  • Target total transaction volume of ₹20,000 crore for FY 2024-25.
  • Expand UPI penetration in rural areas through UPI Lite and UPI 123PAY.