Incentive scheme for promotion of RuPay Debit cards
Incentive scheme for promotion of RuPay Debit cards and low-value BHIM-UPI transactions (P2M)
No. 24(1)/2020-DPD-Part(2).—
- 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 FY 2017-18 to 5,554 crore in FY 2020-21. In the present Covid pandemic, digital payments enable safety for citizens through contact-less modes of payments as well as provide impetus to the economy.
- Although there has been unprecedented growth in digital payments over the past few years, there is potential for further growth as cash continues on a significant scale. It is, therefore, important to boost the adoption of digital payments, targeting untapped markets/ segments/ sectors.
- In compliance with the Budget announcement (FY 2021-22) and to give further boost to digital transactions in the country, it has been decided by the Government to incentivise the acquiring Banks by way of paying percentage of value of RuPay Debit cards transactions (P2M) and low-value BHIMUPI transactions (upto ₹ 2,000) (P2M), for a period of one year w.e.f. April 01, 2021.
- The incentive to the acquiring banks will be provided by the Government at the following rates:
RuPay Debit Card
| Merchant Category | Incentive rate per transaction |
| PoS and eCom transactions (other than Industry Programmes) | 0.40% capped at ₹ 100 |
| PoS and eCom transactions (Industry Programmes*) | 0.15% capped at ₹ 6 |
Fuel, Jewellery and Hospital.
BHIM-UPI P2M Transactions (upto ₹ 2,000)
| Merchant Category | Incentive rate per transaction |
| Other than Industry Programmes | 0.25% |
| Industry Programmes* | 0.15% |
Debt Collections, Fuel, Petroleum products, POI Funding transaction, Telecommunication, Utility
payments, Business/ Personal Services and Hospital.
i. To reduce the financial burden on the Government, lower incentive rate has been proposed on transactions done at merchants under Industry Programmes, as mentioned above.
ii. MeitY, in consultation with NPCI, may review from time to time the utilization of funds under the scheme and accordingly include/ exclude the Industry Programmes.
iii. The duration of the proposed scheme is one year, w.e.f. April 01, 2021.
iv. The estimated financial outlay of the scheme is ₹ 1,300 crore.
v. The allocation of ₹ 1,300 crore will be fungible between RuPay Debit cards and BHIM-UPI.
vi. The Banks are required to show at least 10% YOY growth rate in number of RuPay Debit card transactions (overall, not restricted to P2M) and 50% YOY growth rate in number of BHIMUPI transactions (overall, not restricted to P2M) at the end of last quarter of the scheme.
vii. Reimbursement of the claims will be done on quarterly basis. On successful submission of the claims, 95% of the claimed amount will be reimbursed to the Banks after each quarter. The remaining 5% of the claimed amount of each quarter will be released at the end of last quarter of the scheme.
viii. MeitY will review the growth of RuPay Debit card (volume) and BHIM-UPI (volume) transactions of each bank at the end of last quarter. The pending amount of the previous three quarters (5% per quarter) would be released with the claimed amount of the last quarter, only if the Bank meets the specified growth rate, as mentioned in Para vi. above, else the retained amount, i.e., 5% per quarter of the previous three quarters and 5% of the claimed amount of the last quarter will not be released to the Bank.
ix. The incentive will be shared by the acquiring banks with other stakeholders. The distribution of the incentive amongst the stakeholders will be decided by NPCI in consultation with the Banks.
x. The Scheme is applicable to the Banks having operations in India and transactions done in India.
xi. The operational guideline for implementation of the scheme will be issued to the acquiring banks by MeitY in consultation with NPCI.
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