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Govt drops incentives given for UPI transactions -Mayur Shetty

-The Times of India

MUMBAI: The government has prematurely withdrawn a scheme under which shopkeepers would get an incentive of up to Rs 1,000 for accepting payments using the Unified Payments Interface (UPI). Another one providing customers cashbacks of up to Rs 500 has also been withdrawn and replaced with a scheme that provides rewards of up to Rs 150 but only for Bhim app users.

The move to withdraw the incentives has surprised payment service providers. While there has been a surge in UPI transactions, which allow instant account-to-account transfers, these are yet to gather momentum in retail payments.

In April this year, the government had said that the cashback scheme introduced during demonetisation would be extended up to March 2019. It allowed customers to get a reward of Rs 25 per transaction for each of 20 transfers in a month with a minimum value of Rs 100. There were similar incentives for achieving milestones in volume.

Although the scheme was scheduled to end in March next year, the National Payments Corporation of India (NPCI) came out with a notification on July 3, modifying the scheme with effect from July 1. Banks say this could lead to a customer service issue as many were transacting with the incentives in mind.

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