Incentive worth Rs 2,600 crore approved by the Cabinet to promote RuPay debit cards and low-value UPI transactions

Digital Desk: The Union Cabinet adopted an incentive plan for promoting RuPay debit cards and low-value UPI transactions on Wednesday. Incentives worth Rs 2,600 crore have been approved under the plan for FY23. 

The promotional incentive is in line with the Indian government's attempts to increase digital payments. For the current fiscal year, acquiring banks will be given financial incentives to promote point-of-sale (PoS) and e-commerce transactions utilising RuPay Debit Cards and low-value UPI transactions.

Finance Minister Nirmala Sitharaman announced the government's intention to financially support the expansion of digital payments in her previous budget statement, with an emphasis on increasing the adoption of cost-effective and user-friendly payment platforms. 

As a result of the scheme, overall digital payments transactions increased by 59% year on year, going from Rs 5,554 crore in FY21 to Rs 8,840 crore in FY22. Meanwhile, UPI transactions have increased by 106% year on year, going from Rs 2,233 crore in FY21 to Rs 4,597 crore in FY22.

The government hopes that the incentive programme will aid in the development of a "vibrant digital payment ecosystem" in the country. The plan will also aid in the promotion of UPI Lite and UPI123PAY as cost-effective and user-friendly digital payment options.