Why is in News?
The Union Cabinet recently approved an incentive scheme for promoting low-value BHIM-UPI transactions (P2M) in FY 2024-25, offering a 0.15% incentive on UPI payments up to Rs2,000 for small merchants.
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BHIM-UPI
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- BHIM is a mobile app developed by the National Payments Corporation of India (NPCI) that facilitates digital payments using the UPI platform.
- Direct Bank Payments - BHIM allows users to make direct bank payments to anyone on UPI using their UPI ID or by scanning their QR code.
- Easy Transactions - It enables simple, quick, and easy transactions using the Unified Payments Interface (UPI).
- Financial Inclusion - The app aims to promote financial inclusion and make India a digitally empowered society.
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- Aim - To boost digital payments, expand UPI adoption in rural areas, and ensure a robust payment infrastructure.
- Key Highlights of the Scheme - Transaction Limit – Covers only UPI (P2M) transactions up to Rs2,000 for small merchants.
- Incentive Structure
- Small Merchants - 0.15% incentive per transaction for payments up to Rs2,000.
- Large Merchants - No incentive for any transaction.
- Transactions Above Rs2,000 - No incentive for any merchant category.
- Reimbursement Structure
- 80% of claims by acquiring banks will be disbursed unconditionally.
- Remaining 20% will be reimbursed upon fulfilling certain conditions.
- Objectives of the Scheme
- Promote the Indigenous BHIM-UPI Platform
- Strengthen Digital Payment Infrastructure
- Ensure System Reliability.
- Expand UPI in Rural Areas – Increase penetration in tier 3-6 cities via innovative solutions like
- UPI 123PAY (Feature phone-based payments)
- UPI Lite & UPI LiteX (Offline payments)
Reference
PIB - Incentive scheme for promotion of low-value BHIM-UPI transactions
