Fancy yourself. 495 crores (.5 73.5 million) What do you do?
It can get you 100 Lamborghini Aventadores. It can get you three Boeing 747s. మీరు You can buy almost half of Flipkart worth 20 billion. But if you are the Government of India, you will not do anything like that. Instead, the government is set to spend seven months (from April 2017 to October 2017) on cashbacks to promote the use of the India Interface for Money, which is increasingly known as an acronym for the payment app BHIM. Launched in December 2016, BHIM runs on the Unified Payments Interface (UPI) and is owned by the National Payments Corporation of India (NPCI), a private company with private and government banks in the country.
495 crores is just the tip of the iceberg. According to industry observers, the Ministry of Electronics and Information Technology (MeTY) is willing to spend Rs2,000 crore ($ 300 million) each year to subsidize the cost of bank debit card transactions at just under Rs2,000 ($ 30). Combined with government spending to promote Bhim, the government is, in theory, willing to spend around Rs 2,500 crore (5 375.8 million) every year to promote digital transactions.
The move is part of the Center’s new mission to promote cashless transactions in November 2016 after the demonetization of nearly 86% of the country’s currency. Reduce this figure and we can err that the government is willing to spend around Rs 208 crore (. 30.8 million). ) Every month to push cashless transactions.
But why should the government remove cashbacks? And, nevertheless, why BHIM?
A level playing field?
Think of it this way. For the past three years, everyone has moved into the uncle’s payments business. In some form. Google has. Facebook with WhatsApp. And many, many others. Everyone wants customers to transact with them. And to get these customers, they’re spending money. The government of India jumps in with all these. The government now has two schemes – one for consumers and the other for merchants. For customers, they can get a cashback of Rs.50 (74 0.74) after making three separate transactions. If they refer the app to a new user, they get $ 25 ($ 0.37). The referee (new user) will also get the same amount.
Traders need to complete 20-50 transactions per month to get cash bonus of Rs. After crossing 50 transactions, traders get Rs2 per transaction up to Rs950 ($ 14). Merchants can withdraw up to 1000 rupees ($ 14.8) per month.
The BHIM cashback program launched in April 2017. It has been extended twice since then.
But will the government also promote Bhim in the first place? Remember, this app is owned by bank-owned NPCI and, therefore, the government does not have this app. The government’s decision to backfire in the industry is because the applications of private companies and banks are not eligible for these cashbacks and they have to be promoted in person. Significantly, the adoption of UPI is currently run by PhonePay, Google Tez, PayTM * and WhatsApp. Bhim currently accounts for only 6.6% of the number of transactions in UPI.
In response, the NPCI said that bank apps that rebrand themselves to Bhim will be eligible for cashbacks from the government from April. Note that this only applies to banks’ UPI applications, so PayTM, as it is now a bank, has rebranded its service as PayTM Bhim UPI. Google Tez, WhatsApp, Chiller and other third party UPI apps are not eligible for this. “Basically, all the bank apps have now been converted to Bhim UPI,” Deepak Sharma, Chief Digital Officer, Kotak Mahindra Bank, told The Ken. “Our app has rebranded Kotak Payne Bhim Kotak Pay. So it’s not BHIM as a BHIM standalone app. As long as any UPI app is branded with Bhim, they all qualify for cashbacks, ”he added.