Government approves Rs 1,500 crore sop to boost smaller UPI payments for small merchants

The Union Cabinet on Wednesday approved an incentive scheme worth approximately ₹1,500 crore to promote UPI person-to-merchant (P2M) transactions below ₹2,000.

Under the scheme, no Merchant Discount Rate (MDR) -— the fee charged by payment processing companies to merchant companies — will be applicable on UPI transactions below ₹2000. To further encourage the adoption of digital transactions, small merchants will receive a 0.15 per cent incentive per transaction for UPI payments under ₹2,000.