Government approves incentives for UPI payments up to ₹2,000; PCI chairman expresses discontent

The primary thing is to reduce the reliance on NPCI and promote digital payments for over to Rs 2000. This plan was designed specifically for small businesses so that they can profit from digital payments without incurring redundant cost.

These banks will also be rewarded. Banks will receive 80% of the incentive claims each quarter immediately. The remaining 20% will be based on service quality. A bank that keeps its technical error rate below 0.75 percent and makes sure its system is up 99.5% or more of the time will get the full incentive.

The banks will be pushed to improve the digital payment infrastructure of their banks and offer better services.

This scheme simplifies payments, makes them safer and briskly, without charging redundant freights. The scheme will be more profitable to small merchandisers who were preliminarily reluctant to accept digital payments because of the redundant freights. The scheme supports the government vision of a cashless society, by helping to formalize deals and increase translucency.

The government wants to make sure that digital payments are reliable and available to all. It does this by linking incentives with bank performance. The scheme also hopes that UPI usage will be expanded in rural and smaller towns by promoting feature-phone-based payments.

"With zero MDR for UPI, and the Government allocating only Rs 1500 crore to process transactions worth Rs 246,82 lakh crore by 2024, it is not enough to support the ecosystem. Vishwas patel, joint MD of Infibeam Avenues, and chairman of Payments Council of India, said.

Only merchants who have a turnover of more than 40 lakhs rupees can be charged a MDR that is controlled at 25 BPS. Patel added that the incentives for small merchants can be continued by offering them a Zero MDR.