The Cabinet on Wednesday approved a Rs 2,600 crore scheme for promoting RuPay debit cards and low-value BHIM-UPI transactions.
Under the scheme, banks will be provided financial incentives for promoting Point of Sale (PoS) and e-commerce transactions using RuPay and UPI in the current financial year.
The decision in this regard was taken in the meeting of the Cabinet Committee on Economic Affairs (CCEA), headed by Prime Minister Narendra Modi.
"India's strides in digital payments will be further strengthened by today's Cabinet decision regarding promotion of RuPay Debit Cards and BHIM-UPI transactions," Modi said in a tweet.
The scheme would help in building a robust digital payment ecosystem. It would also promote UPI Lite and UPI123PAY as economical and user-friendly digital payments.
In December alone, UPI achieved a record of 782.9 crore digital payment transactions with a value of Rs 12.82 lakh crore.
"The approved incentive scheme for promotion of RuPay Debit Cards and low-value BHIM-UPI transactions (P2M) in FY 2022-23 has a financial outlay of Rs 2,600 crore," an official statement said.
Briefing reporters after the Cabinet meeting, Union Minister Bhupender Yadav said this will help in taking the digital payment system to MSMEs, the unorganised sector and farmers.
In 2021-22, the government approved an incentive scheme in compliance with the budget announcement of 2021-22 to give a boost to digital transactions. In the 2022-23 Budget, the government announced its intent to continue the financial support.
The total digital payments transactions have registered a year-on-year growth of 59 per cent, rising from 5,554 crore in 2020-21 to 8,840 crore in FY2021-22.
BHIM-UPI transactions have registered a year-on-year growth of 106 per cent, rising from 2,233 crore in FY2020-21 to 4,597 crore in FY2021-22.
The statement further said that the National Payments Corporation of India (NPCI) had sought incentivisation of BHIM-UPI and RuPay Debit Card transactions to create a cost-effective value proposition for ecosystem stakeholders, increase merchant acceptance footprints and faster migration from cash payments to digital payments.