New Delhi: The Union Cabinet on Wednesday approved a Rs 1,300-crore scheme to promote domestic RuPay debit cards and low-value digital transactions to promote their use among the marginalized population, a move that will help the country It can challenge the dominance of rivals like Visa and Mastercard.
The Center approved a scheme to provide small amount incentives for transactions done through debit cards like RuPay and BHIM UPI.
“Under the scheme, the government-acquired banks will be incentivized by paying a percentage of the value of (P2M) transactions done through RuPay debit cards and low-value BHIM-UPI payments at an estimated financial outlay. The payment of ₹1,300 crore for a period of one year with effect from April 1, 2021, said an official statement.
After the cabinet meeting, Electronics and IT Minister Ashwini Vaishnav told reporters that the government would reimburse the transaction charges levied on digital payments made by merchants as part of the Merchant Discount Rate (MDR).
He said that 423 crore digital transactions worth Rs 7.56 lakh crore took place in November.
The approved scheme will include reimbursement on digital transactions up to Rs 2,000 using RuPay debit cards and BHIM-UPI.
The scheme has been prepared in compliance with the budget announcements (FY21-22) by the central government to further promote digital transactions in the country.
The scheme will facilitate banks to build a robust digital payments ecosystem and promote RuPay Debit Card and BHIM-UPI digital transactions across all segments and segments of the population and further deepen digital payments in the country.
It will also help create accessible digital modes of payment for the unbanked and marginalized population outside the formal banking and financial system.
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