Government Boosts Digital Economy with UPI Incentive of Rs 1,500 Crore

The Union Cabinet has approved a Rs 1,500 crore incentive scheme to promote low-value UPI transactions in India. The scheme will cover transactions below Rs 2,000 and the government will bear the Merchant Discount Rate. It aims to boost digital payments among small merchants for 2024-25.

The Indian government has announced a significant incentive scheme to boost digital payments, with the Union Cabinet approving an outlay of approximately Rs 1,500 crore. This initiative is designed to encourage UPI transactions below Rs 2,000, particularly targeting small merchants.

The scheme, unveiled by Prime Minister Narendra Modi's Cabinet, will cover the Merchant Discount Rate (MDR) for payments that fall under Rs 2,000. Effective from April 1, 2024, to March 31, 2025, this move underscores the government's commitment to advancing the digital economy.

Financial incentives amounting to 0.15% per transaction will be provided to enhance UPI usage among small merchants, underscoring a focused support approach for financial inclusivity in the economy.

(With inputs from agencies.)