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BHIM-UPI Incentive Scheme

  • 20 Mar 2025

On 19th March 2025, the Union Cabinet approved an incentive scheme worth Rs.1,500 crore to promote low-value BHIM-UPI transactions (Person-to-Merchant) from 1st April 1, 2024, to 31st March 2025.

Key Points

  • Targeted Transactions: The scheme focuses on UPI payments below Rs.2,000, benefiting small merchants.
  • Incentive Structure: Small merchants will receive 0.15% per transaction, while large merchants are excluded.
  • Performance-Based Disbursement: 80% of incentives will be disbursed quarterly, with 20% linked to uptime (99.5%) and technical decline rate (<0.75%).
  • Boost to Digital Payments: Aims to expand financial access, improve cash flow, and promote UPI adoption in rural areas.
  • Government Goals: Strengthen BHIM-UPI, reduce cash dependence, and achieve a transaction volume of Rs.20,000 crore in FY 2024-25.