Finance Minister Nirmala Sitharaman announced a Rs 2,000 crore allocation for incentive schemes promoting RuPay debit cards and low-value BHIM-UPI person-to-merchant transactions in the Union Budget 2026-27, matching what the government ultimately spent last year.The allocation represents a significant increase from the Rs 437 crore initially budgeted for UPI incentives last year, which was later raised to over Rs 2,000 crore following inputs from the Payments Council of India.The incentives have become crucial for digital payment companies as UPI and RuPay debit card transactions currently operate under a zero merchant discount rate regime, meaning merchants pay no fees for accepting these payments. The Merchant Discount Rate, typically a percentage of the transaction amount, covers costs related to payment infrastructure, fraud prevention, and settlement services.However, the digital payments promotion outlay did not impress the industry. “With zero MDR for UPI and the government allocating a mere Rs 2,000 crore for processing, 30 crore transactions every day for free will choke the entire ecosystem for funds for scaling and growth. We were expecting the government incentive to be above Rs 10,000 crore,” Vishwas Patel, Chairman of industry body Payments Council of India, said in a statement.”With increasing deployment and servicing costs as… Read MoreYourStory RSS Feed
