Incentive scheme for promotion of RuPay Debit Cards and low value BHIM UPI transactions.

EXTRAORDINARY PART I —Section 1 PUBLISHED BY AUTHORITY No. 61] NEW DELHI, TUESDAY , MARCH 12, 2024 /PHALGUNA 22, 1945 CG-DL-E-12032024-252902 MINISTRY OF FINANCE (Department of Financial Services ) NOTIFICATION New Delhi, the 12th March , 2024 Subject: Incentive scheme for promotion of RuPay Debit Cards and low -value BHIM -UPI transactions (P erson to Merchant ) for financial year 2023-24. No 9/27/2023 – FI (Part) 1.—The Government is taking various initiatives to promote digital payments. Over past few years, digital payment transactions have witnessed tremendous growth across the country with the number of transactions growing from 2,071 Crore in financial year 2017 -18 to 13,462 Crore in financial year 2022 -23. 2. Although there has been an unprecedented growth in digital payments over the past few years, there is potential for further growth. It is, therefore, important to promote the adoption of digital payments, targeting untapped markets or segments or sectors. 3. In compliance with the Budget announcement ( financial year 2023 -24) and to give further boost to digital transactions in the country, it has been decided by the Govern ment to incentivise the Banks and other payment system operators and app providers for promoting RuPay Debit Cards transactions and low -value BHIM -UPI transactions (upto ₹ 2,000) ( Person -to-Merchant - P2M ), for financial year 2023 -24. The admissible incentive is to be calculated as per the transaction value processed on quarterly basis. 4. This incentive scheme will promote digital payments by incentivising banks and other payment system operators to build a robust digital payments ecosystem and to promote RuPay Debit Cards and BHIM -UPI as low -cost digital payments mode across all sectors and segments of population. In line with various digital initiative s under Atmanirbhar Bharat , the scheme will also promot e transactions using indigenously -developed modes of digital payments, namely , BHIM -UPI Lite or BHIM -UPI LiteX, “UPI Conversational Payments - Hello! UPI” and BHIM - UPI 123PAY as economical and user -friendly digital payments solutions. 5. The Government approved the proposal to continue the “Incentive scheme for promotion of RuPay Debit Cards and low -value BHIM -UPI transactions (P erson to Merchant )”, for a period of one year and at a financial outlay of ₹ 3,500 Crore . This will provide financial incentive to acquiring banks as per the incentive rates and other details given below : Category Incentive rate per transaction Transactions using RuPay Debit Cards at point -of-sale (PoS) and through e -commerce (ecom) Other than industry programmes 0.40%, capped at ₹ 100 Industry programmes* 0.15%, capped at ₹ 6 * i.e., Insurance, Mutual funds, all kind of payments to various Government departments/agencies, Education, Railways, Agriculture, Fuel, Jewellery & Hospitals BHIM -UPI P2M transactions (up to ₹ 2,000) Other than industry programmes 0.25% Industry programmes** 0.15% ** i.e., Insurance, Mutual funds, all kind of payments to various Government departments/agencies, Education, Railways, Agriculture, Debt Collections, Fuel, Petroleum products, Point of interaction funding transaction, Telecommunications, Utility payments, Business/Personal services and Hospitals 5.1 The duration of the scheme is one year from the 1st April, 2023 to 31st March, 2024 . 5.2 The financial outlay for the scheme is ₹ 3,500 Crore, with ₹ 500 Crore allocated for RuPay Debit Card and ₹ 3,000 Crore allocated for BHIM -UPI. While, the allocation will be fungible from BHIM -UPI to RuPay Debit Cards but vice versa is not applicable. 5.3 Secretary , Department of Financial Services (DFS), in consultation with Financial Advisor (DFS) and National Payment Corporation of India ( NPCI ), may review from time to time the utilisation of funds under the scheme and, accordingly, make changes, if required, in the scheme including adding or omitting merchant categories included in industry programmes. 5.4 Reimbursement of claims of banks will be done on a quarterly basis, to the following extent , namely : - (a) for the first, second, and third quarter of the scheme, 10 0 percent of the admitted claim amount for the bank to be disbursed and for the fourth quarter of the scheme, 90 percent of the admitted claim amount for RuPay Debit Card and 80 percent of the admitted claim amount for BHIM -UPI to be disbursed ; (b) the reimbursement of the remaining percentage of the admitted claim amount for fourth quarter will be subject to fulfilment of the condition s in sub-clause (i) for RuPay Debit Card and sub-clauses (ii) and (iii) for BHIM - UPI; (i) Acquirer Bank (which submits the claims) has to show at least 5 percent growth in January’24 -March’24 over Januray’23 -March’23 in the number of RuPay Debit Cards transactions (PoS and e -commerce transactions) “as Issuer”, to be eligible for reimbursement o f 10 percent of the remaining admitted claim of fourth quarter , that is , January’24 - March’24 ; (ii) Acquirer Bank has to enable the features of BHIM -UPI Lite and BHIM -UPI LiteX “as Remitter” and to show at least 5 percent of BHIM -UPI P2M transactions on BHIM -UPI Lite or BHIM -UPI LiteX during the last quarter of the scheme, to be eligible for reimbursement of 10 percent of the admitted claim for the fourth quarter ; (iii) Acquirer Bank has to enable “UPI Conversational Payments - Hello! UPI” in app and “BHIM -UPI 123Pay” (any of the four approaches) “as Payer PSP”, to be eligible for reimbursement of 10 percent of the admitted claim for the fourth quarter. 5.5 DFS, in consultation with NPCI, will issue operational guidelines for implementation of the scheme, including the incentive sharing mechanism. 5.6 The Scheme shall be applicable to the Banks having operations in India and transactions done in India. ABHIJIT PHUKON , Economic Advis er Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi -110064 and Published by the Controller of Publications, Delhi -110054.