The Modi government at the Center took a big decision regarding Unified Payment Interface (UPI) today i.e. on Wednesday. The Union Cabinet gave the green signal to the incentive scheme of Rs 1,500 crore to promote small digital transactions. This scheme is being implemented with the aim of reducing the cost of many stakeholders involved in the UPI ecosystem. This scheme is for small traders who make transactions up to Rs 2,000.

When will the new scheme be implemented?

Under this scheme, small traders will get incentives at the rate of 0.15% on every transaction, which will promote digital payments. This scheme will be implemented for the new financial year i.e. from 1 April 2024 to 31 March 2025. However, Union Minister Ashwini Vaishnav later clarified that this scheme will continue next year as well.

How will it benefit?

This scheme will make digital payment even easier and cheaper for the users. Now customers will be able to make their small purchases like tea, grocery items or other daily-use products through UPI without any additional charge. This incentive for small traders will help them adopt digital payment, so that they can take their business forward.

How will the scheme work?

In this scheme, no Merchant Discount Rate (MDR) charge will be levied on UPI transactions. Merchants transacting less than Rs 2000 will get an incentive of 0.15% on every transaction. However, big traders will not get any benefit. Let us tell you that under this scheme, 80% of the incentive amount will be given to the banks quickly every quarter. The remaining 20% ​​amount will be given only if the banks maintain high service standards. In this, the technical glitch rate is less than 0.75% and the bank's system uptime is more than 99.5%.

Preparations to eliminate pull transactions

Let us tell you that the National Payments Corporation of India (NPCI) is working on eliminating 'collect calls' for merchant payments step by step to prevent online fraud through the Unified Payments Interface (UPI). Let us tell you that a collect call is a 'pull' transaction, in which a merchant sends a request for payment to the customer. According to RBI data, in the first six months of financial year 25, 13,133 fraud cases were reported for cards and digital banking platforms, involving Rs 514 crore.