[Back Again] Bhim App Cashback On UPI
The government is taking a leaf from payment programs like Google Tez and PhonePe to offer cashbacks to users and popularise the Bharat Interface for Mobile (BHIM) payments program in the nation.
The transfer will kickoff on April 14, the birth anniversary of Babasaheb Ambedkar, once the government will commit up to Rs 900 crore in flashbacks and incentives to retailers to improve adoption of the program, that runs on the Unified Payment Interface (UPI).
The BHIM program was launched by Prime Minister Narendra Modi at December 2016, however, the UPI adoption improved significantly with the launch of Google Tez, PhonePe and Paytm who aggressively marketed their merchandise with cashbacks to users.
“We’ve noticed the model of PhonePe, Google Tez and Paytm, whenever there are incentives or cashbacks, the transaction volumes pick up. This is just another behavioral change,” said a top government official who’s aware of the development. The person did not want to be named. The share of BHIM in total UPI trades has dropped to 5.75 percent in February from 40.5 percent in August last year, according to the latest data from the National Payments Corporation of India (NPCI), which tracks digital transactions in the nation.
The official said the move to offer cashbacks and incentives is to encourage transactions and reduce use of money. For this, the incentives for retailers for using BHIM-Aadhaar platform will be significantly improved to 0.5% of the transaction value upto Rs 10,000 from the sooner 0.25% of the transaction value of just Rs 2,000. The government admits that the offtake of the previous scheme for retailers has been low (only a couple of lakh) and thus the change in cap in addition to the percentage was demanded.
Adopting the model as their counterparts, first time users will find a Rs 51 cashback on a transaction value of Rs 100. For the next 20 trades that are unique, people will get upto Rs 25 each trade. The incentive was fixed at a Rs 100 and for the transactions it’s been fixed for a value each trade at Rs 200.
For over 100 trades at a value of Rs 250 is Rs 10. The official stated that the incentive was improved so that they can earn between Rs 2 and Rs 50 per trade, and Rs 2,000 a month. The payments drive in the country has been given a push following the demonetisation exercise was declared by the Narendra Modi government in November 2016. The Center, which has been encouraging and incentivising a variety of means of cashless payments like credit/debit cards, QR codes, UPI and USSD, etc, has also recently waived off the retailer discount rates (MDR) on debit-card usage.
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He added that while the government will embark upon a major publicity campaign to deal with the awareness issue, it’s popularising obligations through QR codes to tackle the shortage of machines issue that was PoS. The government had set a goal of attaining 25-billion digital transactions by March ’18 and the amount has touched 20.40 billion.
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