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Below is Perspective on Announcement of rolling out Rs 1300 crore incentive scheme By Ankit Bhatnagar, Head of Product, Mswipe

“The announcement is definitely a welcome move. The fund will provide much needed support to banks and payment service providers to invest in their services which will help strengthen digital payments penetration. MDR on RuPay debit card transactions and UPI is zero as on date. While this has incentivised merchants to adopt digital payments at large, banks and PSPs have been struggling to meet investment needs to service the merchants for Digital Payments. The incentivisation will help industry address this gap. PIDF (Public Infrastructure Development Fund), for digital payments provided similar support to acquiring banks and PSPs to invest in acquiring new merchants where over 2.5 lakh terminal merchants and 55 lakh digital acceptance merchants were added to the ecosystem. This fund will similarly help banks and PSPs to support these acquired merchants to push higher digital transactions at these merchant outlets. However, in PIDF the eligibility criteria to avail benefits for banks and PSPs were stringent which made it difficult to avail benefits, similarly when similar incentive was rolled out earlier by the Govt where MDR on RuPay and UPI txns was reimbursed by Govt. to the banks, PSPs faced certain challenges in getting the MDR reimbursed through the acquiring banks. These challenges need to be addressed while rolling out the scheme.”

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