UPI Incentive Scheme: Central Cabinet Approves Incentive Plan for UPI Transactions – Who Will Benefit?

New Delhi, March 19, 2025: The Union Cabinet has approved a major UPI (Unified Payments Interface) Incentive Scheme, aimed at boosting digital payments across India. This decision is expected to benefit merchants, banks, and digital payment service providers while promoting a cashless economy.

Key Highlights of the UPI Incentive Scheme:

✔ Government-backed incentives for merchants and businesses using UPI for transactions
✔ Encouragement for small businesses to adopt digital payments
✔ Boost to India’s digital economy by increasing UPI adoption
✔ Financial support for banks and payment service providers to maintain zero MDR (Merchant Discount Rate) charges

Who Will Benefit from the UPI Incentive Scheme?

1️⃣ Merchants & Small Businesses: The scheme will incentivize digital transactions, making it easier for small traders to switch from cash to UPI payments without extra costs.

2️⃣ Banks & Payment Service Providers: Since UPI transactions do not have transaction fees for users, banks and payment platforms will receive government support to sustain and expand digital payment infrastructure.

3️⃣ Consumers & Digital Users: Encouraging more businesses to accept UPI will lead to greater convenience for customers, promoting safe, cashless, and hassle-free transactions.

Why This Decision Matters?

India has seen rapid growth in digital transactions, with UPI leading as the most preferred payment mode. The incentive scheme will further accelerate digital payment adoption, reducing reliance on cash and supporting financial inclusion.

The initiative is in line with the government’s vision of Digital India, ensuring that UPI remains free, accessible, and widely used by all sections of society.