- Why in news
- On 16 February 2026, the Department of Financial Services released a report assessing the incentive scheme for RuPay debit cards and low-value BHIM-UPI (P2M) payments. It was released at the Chintan Shivir held on 13–14 February 2026.
- What it is
- The Incentive Scheme for RuPay Debit Card and low-value BHIM-UPI (Person-to-Merchant) transactions gives budgetary support to acquiring banks and ecosystem players. It aims to keep digital payments affordable, reduce cash dependence and formalise routine economic activity. It ran from FY 2021–22 to FY 2024–25.
- Who released and who did the study
- The Department of Financial Services (Ministry of Finance) released the report. An independent third-party agency prepared it in consultation with NPCI.
- Scheme period
- The scheme was introduced in FY 2021–22 and continued through FY 2024–25.
- Survey size
- The primary survey covered 10,378 respondents in 15 States: users, merchants and service providers.
- Budget support
- Budgetary support for the scheme was ₹8,276 crore. Disbursement peaked at ₹3,631 crore in FY 2023–24.
- Main recommendation
- The report calls for targeted steps to strengthen RuPay debit card usage in rural and semi-urban areas, and for promoting UPI Lite.
Don’t confuse with P2M vs P2P: P2M is a person paying a merchant, which this scheme covers. P2P is a transfer between individuals.
Don’t confuse with RuPay vs UPI: RuPay is a card payment network. UPI is an instant real-time account-to-account payment system. NPCI runs both.
Reports and indices: 14 Prelims questions since 2013; they test who publishes a report and what it measures.
Why it matters
- Shows incentives helped make UPI the main payment rail and formalised small transactions.
- Digital footprints improve transparency and credit access for small merchants.
Problems
- RuPay debit card usage remains weak, especially in rural and semi-urban areas.
- Incentive disbursement fell to ₹1,046 crore in FY 2024–25, raising the question of how to sustain the ecosystem without subsidy.
Way forward
- Run merchant enablement programmes and promote UPI Lite for low-value payments.
- Keep investing in connectivity, digital literacy and fraud risk mitigation.
Put in your answer
UPI scale-up: UPI QR deployment grew from 9.3 crore to about 65.8 crore during the scheme period.
User preference: Among surveyed users, 57% preferred UPI against 38% for cash.
- 2017Prelims Q79Which statements on NPCI's role in financial inclusion and RuPay are correct
- 2023Mains GS3 · Q2Status, problems and improvements of digitalisation in the Indian economy
- 2018Prelims Q6Define Merchant Discount Rate, the bank's charge to merchants for card payments
- 2018Prelims Q28Which statements on BHIM app transfers and authentication factors are correct
UPSC’s own questions that come close to this issue, from our Prelims and Mains banks.
No practice question for this one; the card may still help an answer. Why: Lasting scheme topic on digital payments. Report-based facts are mostly background; only 14 of 327 news-linked Prelims questions were on reports, so no question.
Worth revising until Prelims 2027: most news questions come within two years of the event.