Disincentivising the feature that drives the use of government launched UPI (unified payment interface) app-BHIM (Bharath Interface for Money), it has been decided to restrict cashback offers only to new users.
In a recent notification from the NPCI (National Payments Corporation of India), it has instructed banks to limit cashback offers to BHIM transactions made by new users. Also, incentives for merchants who have been accepting payments through UPI have been discontinued starting 1 July.
Only users who are new to using BHIM app, and make 10 unique transactions worth at least Rs 50 each will be able to avail a cashback. A cashback of Rs 150 will be received after the tenth transaction.
The government had launched a scheme with a cashback offer of up to Rs 750 per month in the month of April for payments made using BHIM app. Merchants that were accepting payments using any UPI app could avail a maximum of Rs 1,000 as cashback per month. The offer allowed a cashback receipt of 10 percent of the value of each transaction with a cap of Rs 50.
After a review of this incentive scheme, the ministry of electronics and IT decided upon scaling back the offer significantly through a notification dated 17 July.
The BHIM app, which has been losing to rival payment apps like Google Tez, PhonePeand PayTM used the incentives to shore up its usage. The NPCI-promoted app that accounted for 45 percent of all UPI transactions in August 2017, lost its share to a mere 6.6 percent in June 2018.