Incentives

“There is a cash referral and merchant cashback scheme that UPI BHIM has adopted, we need to expand it, to make it more lucrative to use BHIM,” a top official in the ministry said.

The note also talked about increasing the adoption of the BBPS and printing of a Bharat Quick Response (QR) code to facilitate easier government bill payments.

For example, an electricity bill should have the Bharat QR so that it can be easily paid by scanning the code, using the BBPS gateway.

“The aim is to roll out BBPS at the earliest, so that an umbrella gateway is created for paying all government bills. This will stop cash leakage and pilferage,” said a government official in the know of the matter.

The note said the merchant discount rate, the money that banks charge for card transactions, would be rationalised on debit cards.

The government plans to cap the rate below the existing level of 0.5-1%, sources told HT. A lower rate would encourage even smaller retailers in rural India to shift to card transactions.

Earlier, Prime Minister Narendra Modi had launched a lottery for e-transactions to attract more people and merchants to cashless platforms. The government offers discounts on digital payments for rail tickets, insurance premia, toll-gate passage and refuelling at petrol pumps.

“We have reached 50 lakh transactions in a day through UPI BHIM from just 15 lakh two months back. The aim is 2,500 crore digital transactions by the end of 2017-18. That means 8 crore digital transactions per day,” said Ajay Kumar, additional secretary in the ministry of electronics and IT.

Thirty-eight banks are now associated with the BHIM app, the note said.

“The aim is to link at least up to 60 banks by April 2017, even private wallets should be integrated with BHIM,” said a source familiar with the government’s digital road map.

Paytm, the most popular mobile wallet in the country, has 100 million users a month while Mobikwik has 40 million. Since its launch in December 2016, BHIM has been downloaded over 20 million times.

“The key to increasing e-transactions is investment in infrastructure by digital transaction organisations, so that cash supply levels do not impact it. Money should also be spent on communi- cating the benefits of digital transactions to people,” said Mobikwik co-founder Upasana Taku.

The Centre also wants to launch a “syndicated campaign” with banks, departments and states for growth of digital payments.

The government argues that digital payments will facilitate financial inclusion and easier access to credit apart from ensuring transparent fund flows and a reduction in the cost of cash.

“The government is looking at strengthening the digital payment infrastructure to push more and more people towards it,” said a government official part of the discussion on e-payment incentives.