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Cashbacks & incentives: Govt to take cues from rivals to popularise BHIM



We have noted the model of PhonePe, Google Tez and Paytm, whenever there are incentives or cashbacks, the transaction volumes pick up. This is another behavioural change,u201d said a top government official who is aware of the development. The person did not wish to be named. The share of BHIM in total UPI transactions has dropped to 5.75% in February from 40.5% in August last year, according to the latest data from the National Payments Corporation of India (NPCI), which tracks digital transactions in the country.
The official said the move to offer cashbacks and incentives is also to encourage more transactions on the BHIM platform and reduce usage of cash. For this, the incentives for merchants for using BHIM-Aadhaar platform will be significantly increased to 0.5% of the transaction value upto Rs 10,000 against the earlier 0.25% of the transaction value of just Rs 2,000. The government admits that the offtake of the earlier scheme for merchants has been low (just a few lakh) and therefore the change in cap as well as the percentage was required.
Adopting the same model as their private counterparts, first time users transacting through BHIM UPI will get a Rs 51 cashback on a minimum transaction value of Rs 100. For the next 20 unique transactions, people will get upto Rs 25 per transaction. For the next set of 25-50 transactions, the incentive has been fixed at a total Rs 100 and for the next 50-100 transactions in a month, it has been fixed at Rs 200 for a minimum value of Rs 10 per transaction.
For more than 100 transactions at a minimum value of Rs 250 is Rs 10. The official said that for merchants, the incentive has been increased so that they can earn between Rs 2 and Rs 50 per transaction, and Rs 2,000 per month. The digital payments drive in the country was given a major push after the Narendra Modi government announced the demonetisation exercise in November 2016. The Center, which has been promoting and incentivising various means of cashless payments such as credit/debit cards, QR codes, UPI and USSD, etc, has also recently waived off the merchant discount rates (MDR) on debit-card usage.
In December, it was announced that the government will bear the MDR charges on transactions of up to Rs 2,000 made through debit cards, BHIM UPI or Aadhaar-enabled payment systems to promote digital transactions starting from January 2018 for the next two years. The official said that despite the waiver, the usage of cards still remains low. u201cThere are two issues, while the number of Point of Sale (PoS) machines are still less, awareness is also a challenge.u201d
He added that while the government will embark upon a major publicity campaign to address the awareness issue, it is popularising payments through QR codes to tackle the shortage of PoS machines issue. The government had set a target of reaching 25-billion digital transactions by March u201918 and the number has touched 20.40 billion. ","breadcrumbTags":["BHIM app","unified payment interface","paytm","Narendra Modi","Government","google tez"],"Alttitle":{"minfo":""},"title_share":"Cashbacks & incentives: Govt to take cues from rivals to popularise BHIM"},img_object:null,
fromNewsletter:"0",newsletterDate:"a",ajaxParams:{action:"get_more_news"},author_list:"Surabhi Agarwal",complete_cat_name:"Mobile",wrappedarticle:"N"});'>
u201cWe have noted the model of PhonePe, Google Tez and Paytm, whenever there are incentives or cashbacks, the transaction volumes pick up. This is another behavioural change,u201d said a top government official who is aware of the development. The person did not wish to be named. The share of BHIM in total UPI transactions has dropped to 5.75% in February from 40.5% in August last year, according to the latest data from the National Payments Corporation of India (NPCI), which tracks digital transactions in the country.
The official said the move to offer cashbacks and incentives is also to encourage more transactions on the BHIM platform and reduce usage of cash. For this, the incentives for merchants for using BHIM-Aadhaar platform will be significantly increased to 0.5% of the transaction value upto Rs 10,000 against the earlier 0.25% of the transaction value of just Rs 2,000. The government admits that the offtake of the earlier scheme for merchants has been low (just a few lakh) and therefore the change in cap as well as the percentage was required.
Adopting the same model as their private counterparts, first time users transacting through BHIM UPI will get a Rs 51 cashback on a minimum transaction value of Rs 100. For the next 20 unique transactions, people will get upto Rs 25 per transaction. For the next set of 25-50 transactions, the incentive has been fixed at a total Rs 100 and for the next 50-100 transactions in a month, it has been fixed at Rs 200 for a minimum value of Rs 10 per transaction.
For more than 100 transactions at a minimum value of Rs 250 is Rs 10. The official said that for merchants, the incentive has been increased so that they can earn between Rs 2 and Rs 50 per transaction, and Rs 2,000 per month. The digital payments drive in the country was given a major push after the Narendra Modi government announced the demonetisation exercise in November 2016. The Center, which has been promoting and incentivising various means of cashless payments such as credit/debit cards, QR codes, UPI and USSD, etc, has also recently waived off the merchant discount rates (MDR) on debit-card usage.
In December, it was announced that the government will bear the MDR charges on transactions of up to Rs 2,000 made through debit cards, BHIM UPI or Aadhaar-enabled payment systems to promote digital transactions starting from January 2018 for the next two years. The official said that despite the waiver, the usage of cards still remains low. u201cThere are two issues, while the number of Point of Sale (PoS) machines are still less, awareness is also a challenge.u201d
He added that while the government will embark upon a major publicity campaign to address the awareness issue, it is popularising payments through QR codes to tackle the shortage of PoS machines issue. The government had set a target of reaching 25-billion digital transactions by March u201918 and the number has touched 20.40 billion.
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