The Union Cabinet has approved the incentive plan to encourage low-value BHIM-UPI transactions (P2M)

In FY 2024–2025, a total of 1,500 crore will be spent to set up the system, which will include UPI Person-to-Merchant (P2M) transactions.

Key Elements of the Plan Incentive: Transactions up to Rs. 2,000 that qualify as small merchant transactions will receive a 0.15% incentive.

The incentive is given to the issuer bank (the customer's bank), the payment service provider bank, app providers, and the acquiring bank (the merchant's bank).

Support for the domestic BHIM-UPI platform is the goal. Achieving the 20,000 crore total transaction volume target for FY 2024–2025.

UPI penetration in tier 3 to tier 6 cities, especially in remote and rural areas, by promoting innovative products like feature-rich offline (UPI Lite/UPI LiteX) and phone-based.

The fact that UPI services are free for small merchants is one of the key benefits.The Merchant Discount Rate in 2020 was previously

MDR is the fee that companies pay to accept payments with credit and debit cards, as well as money sent through digital wallets and net banking. It was set to zero for BHIM-UPI transactions.

About the Bharat Interface for Money (BHIM) in 2016 a payment app that enables basic transactions by utilizing the Unified Payments Interface (UPI).

The UPI system was developed by the National Payments Corporation of India (NPCI) to encourage digital payments. It combines multiple bank accounts into a single mobile application (of any participating bank).

NPCI International Payments Limited, also known as NIPL NIPL has partnered with a Singaporean payment provider to expand UPI's acceptance.

Regarding NIPL

It became a fully owned subsidiary of NPCI in 2020. It is focused on introducing RuPay, a domestic card program, and UPI, a mobile payment solution, outside of India.