Government Withdraws Incentives for UPI transaction

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Government Withdraws Incentives for UPI transaction
Government Withdraws Incentives for UPI transaction

In the recent move, the Government has dropped incentive scheme of up to Rs 1,000 for the payments made via Unified Payments Interface (UPI) for any shopkeeper 8 months before its maturity.

The authority has also replaced the cashback offers, up to Rs 500, with Rs 150 for its BHIM app users. The move is the result of the UPI transaction being used more last month in comparison to slow motion in the last couple of months.

According to NPCL, in June the transaction increases up to 246.37 million, while the value which was recorded was Rs. 40,834.03 crore with 22 % more growth as compared to the previous month. UPI recorder 189.98 million transaction value in May and 190.08 million transactions value in April.

The government had extended cashback scheme till March 2019 in April this year. The scheme was to offer a reward for Rs 25 on each transaction of each 20 transfers in a month with a minimum value of Rs 100.

Government Withdraws Incentives for UPI transaction
Government Withdraws Incentives for UPI transaction

UPI transactions

NPCL will be unveiling UPI 2.0 week but now it has changed the scheme from July 1, 2018. It has limited rewards to users of BHIM app and ceased the incentive to other banks apps.

BHIM has seen the average growth figure. BHIM in May recorder 12 percent growth. , and in June it saw a 15 percent increase in transaction volume. In the same month, BHIM also increased by 9 % that is Rs 6261.25 crore transaction in value.

This government app has been targeted by a third-party payments service and has been accused of cheating on cashback offers and inducements.

Mobikwik CEO Bipin Preet Singh has alleged that BHIM UPI is biased and giving cashback offers only if you use BHIM app.

Other payment service providers, including Paytm, Google Tez, and PhonePe have seen a growth in UPI transactions.

Paytm and PhonePe own 53 % market share in UPI transactions, Google Tez in 9 months has grabbed 22 percent of market share, and registered 54 million transactions.

The UPI number is expected to see a growth with the entry of WhatsApp, it the major platform with over 200 million users in the country.

The development on UPI was reported by ET.

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