Cabinet Approves Incentive Scheme for Promotion of Low-Value BHIM-UPI Transactions

 The Union Cabinet, chaired by Prime Minister Shri Narendra Modi, on 19 March approved the ‘Incentive Scheme for Promotion of Low-Value BHIM-UPI Transactions (P2M)’ for FY 2024-25 with an estimated outlay of Rs. 1,500 crore. The scheme, running from April 1, 2024, to March 31, 2025, aims to encourage small merchants to adopt digital payments.

Under this scheme, UPI transactions up to Rs. 2,000 made to small merchants will be incentivized at 0.15% per transaction value, while transactions to large merchants will receive no incentive. The government will disburse 80% of the claimed amount by acquiring banks upfront, while the remaining 20% will be contingent upon maintaining a technical decline rate below 0.75% and a system uptime of over 99.5%.