The Union Cabinet chaired by Prime Minister Narendra Modi has recently approved the “Incentive Scheme for Promoting BHIM-UPI Transactions”. The scheme will give incentives to the small shopkeepers (P2M) for accepting payments through the UPI.

The scheme is for the financial year 2024-25. The government will spend around Rs 1,500 crore on the scheme. The government aims to promote digital transactions and economically empower small merchants.

Applicable to UPI transactions up to ₹2,000

The scheme passed by the Cabinet will apply only to UPI (P2M) transactions up to ₹2,000, which are made by small shopkeepers. Small shopkeepers will get 0.15% incentive on each transaction (on transactions up to ₹2,000).

If a customer buys goods worth ₹1,000 and pays through UPI, the shopkeeper will get an incentive of ₹1.5. Along with this, banks will also get incentives. The government will give 80% of the claim amount to the banks immediately.

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Terms for 20% amount

The remaining 20% ​​amount will be given to the banks when the technical fault of the bank is less than 0.75%. The system uptime of the bank will be more than 99.5%. According to the government, this is easy, safe and fast payment for shopkeepers.

Also, the money will come directly to the bank account. UPI service will be available at no additional cost. A record of digital transactions will be created, which will make it easier to take a loan. At the same time, there will be a facility for easy payment for the customers, no additional charges will be levied.

Merchant Discount Rate Zero

The government aims to complete a transaction of ₹20,000 crore in the financial year 2024-25. Helping those who keep the payment system right. Expanding UPI to smaller towns and villages. Keeping the system operational and reducing lag.

The government is working to promote digital payments. Earlier, the merchant discount rate on RuPay debit card and Bhim-UPI transactions was zero.

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