In a significant move to advance India’s digital payment ecosystem, the Union Cabinet has approved a Rs 1,500 crore incentive scheme for FY 2024–25.
The scheme focuses on promoting low-value BHIM-UPI (Person-to-Merchant) transactions, especially targeting small merchants. With zero Merchant Discount Rate (MDR) for transactions up to Rs 2,000 and a 0.15% incentive for small merchants, the scheme encourages cost-effective and seamless digital payments across India.
The initiative aims to expand UPI infrastructure in rural and semi-urban areas through tools like UPI 123PAY for feature phones and UPI Lite and LiteX for offline payments. It also seeks to enhance system reliability by offering performance-based incentives to acquiring banks.
India continues to lead globally in digital payment innovation, contributing 49% of real-time transactions worldwide in 2023. The scheme signifies another major step in creating a financially inclusive, less-cash economy.
