New Delhi: The Union Cabinet on Wednesday approved a Rs 1,300-crore plan to promote domestic RuPay debit cards and low-value digital transactions to boost their use in marginalised populations, a move that could challenge the clout of rivals like Visa and Mastercard in the country.
The Centre approved a scheme to provide incentives of small amounts for transactions done through debit cards such as RuPay and BHIM UPI.
“Under the scheme, the acquiring banks will be incentivised by the government, by way of paying a percentage of the value of transactions (P2M) done through RuPay Debit cards and low-value BHIM-UPI modes of payments, at an estimated financial outlay of ₹1,300 crore for a period of one-year w.e.f. April 01, 2021," an official statement said.
After the Cabinet meeting, Electronics and IT Minister Ashwini Vaishnaw told reporters that the government will reimburse transaction charges levied on digital payments made by persons to the merchant as part of the merchant discount rate (MDR).
He said that 423 crore digital transactions valued at Rs 7.56 lakh crore took place in November.
The approved scheme will cover reimbursement on digital transactions of up to Rs 2,000, using Rupay debit cards and BHIM-UPI.
The scheme has been formulated in compliance with the Budget announcements (FY21-22) by the central government to further boost digital transactions in the country.
This scheme will facilitate acquiring banks to build a robust digital payment ecosystem and promote RuPay Debit card and BHIM-UPI digital transactions across all sectors and segments of the population, and further deepening digital payments in the country.
It will also help make accessible digital modes of payments to unbanked and marginalised populations outside of the formal banking and financial system.