The Union Cabinet led by Prime Minister Narendra Modi has approved an incentive scheme for promotion of RuPay Debit Cards and low-value BHIM-UPI transactions (person-to-merchant) for a period of one year from April 2022.

The approved incentive scheme for promotion of RuPay Debit Cards and low-value BHIM-UPI transactions (P2M) in the financial year 2022-23 has a financial outlay of ₹2,600 crore.

Under the scheme, acquiring banks will be provided financial incentive, for promoting point-of-sale (PoS) and e-commerce transactions using RuPay debit cards and low-value BHIM-UPI transactions (P2M) for the current financial year 2022-23.

In her Budget speech last year, Union Finance Minister Nirmala Sitharaman had said that the government will continue the financial support for digital payments, with a focus on promoting use of payment platforms that are economical and user-friendly.

In FY22, the government had approved an incentive scheme in compliance with the budget announcement of FY22 to give a further boost to digital transactions. As a result, total digital payments transactions registered a year-on-year growth of 59%, rising from ₹5,554 crore in FY21 to ₹8,840 crore in FY22. BHIM-UPI transactions registered a year-on-year growth of 106%, rising from ₹2,233 crore in FY21 to ₹4,597 crore in FY22.

UPI operator National Payments Corporation of India (NPCI) recently extended the deadline for third-party apps to comply with its 30% market share cap guidelines by two years. NPCI said the new deadline would be December 31, 2024, from January 1, 2023, earlier. Walmart-owned PhonePe commands 40% market share of the Unified Payments Interface (UPI) network.

Transactions on the Unified Payments Interface (UPI) platform hit a record high of 782 crore in December 2022. The total value of UPI transactions also hit an all-time high of ₹12.8 lakh crore.

Follow us on Facebook, Twitter, YouTube & Instagram to never miss an update from Fortune India. To buy a copy, visit Amazon.