The National Payments Corporation of India (NPCI) has launched ‘UPI Vyapar Saamh Yojana’ to expand infrastructure for adoption of Unified Payments Interface (UPI) among small merchants. Under this scheme, on fulfilling the eligibility conditions, an incentive of Rs 300 for each physical QR code and Rs 750 for each soundbox will be given. In a circular issued on November 11, NPCI said the initiative aims to connect new small merchants with UPI and promote continued growth in UPI transactions, especially in small towns and areas where UPI penetration is still low. The scheme will focus on Tier 3 to Tier 6 centres, North-Eastern States, Union Territories of Jammu and Kashmir and Ladakh and eligible traders covered under the proposed schemes of the Central Government.
Circular issued
The circular said that NPCI has launched the ‘UPI Trade Enabled Scheme’ to expand UPI acceptance infrastructure, add new small merchants and promote continuous growth in UPI transactions. According to the circular, the plan includes setting up UPI acceptance infrastructure (such as physical QR codes and soundboxes). Along with this, transactional incentives will also be provided to increase continued usage and transactions. This incentive structure has three parts. This includes the addition of new merchants, increased transactions, and incremental (incremental) growth. The allocation of funds for this has been kept at 30 percent, 50 percent and 20 percent respectively.
Who will get how much incentive?
Under the first component (Component A), which focuses on adding new merchants, per QR code Rs. 300 per soundbox and Rs. 750 will be given as incentive. To be eligible, merchants should have at least 25 eligible transactions in at least two out of three months and the total value of transactions per month should be at least Rs. 5,000 should be. As per the eligibility conditions, the traders should also be in the targeted geographical areas or covered under the proposed schemes of the central government.
For the second part (Component B), 50 percent of the incentive fund is earmarked. The objective is to encourage transaction growth by linking the incentive to the increase in the volume of eligible UPI transactions in each quarter. Under this component, the eligible transaction volume must grow at least 5 percent every quarter to receive the incentive. As per the circular, the incentive amount has been fixed at 0.03 per cent of the total eligible transaction value and an additional incentive of 50 per cent will also be given for targeted geographical areas.
Whereas, ‘Component C’ – which covers the remaining 20 per cent of the fund – aims to promote incremental growth of transactions in targeted sectors. Under this component, the incentive will be calculated on the basis of 0.20 percent of the incremental value of eligible transactions in the previous quarter. This amount will be in addition to the incentives received under ‘Component B’. The scheme structure includes incentives for expanding the payment acceptance structure and rewards linked to transaction activities. It aims to engage new merchants and promote continued use of UPI for digital payments.
