NPCI Launches UPI Vyapaar Saksham Scheme

The National Payments Corporation of India (NPCI) has launched the UPI Vyapaar Saksham Scheme to expand UPI acceptance among small merchants. The scheme is funded by a 5% contribution from members’ merchant discount rate (MDR) collections on UPI and runs for three years from the date MDR on UPI is implemented. NPCI has deferred that MDR until after Diwali, at a date yet to be notified.

Acquiring banks will receive INR 300 for each physical QR code and INR 750 for each soundbox deployed at new merchants, after the merchant completes 25 eligible transactions in two months of a quarter and INR 5,000 in monthly value.

Merchants with annual turnover of up to INR 40 lakh are eligible and the scheme focuses on Tier III to Tier VI cities, including merchants covered under PM SVANidhi and PM Vishwakarma. Merchants that already received QR or soundbox support through other programmes, including NABARD’s, cannot claim again.

The fund is split three ways: 30% for onboarding new merchants, 50% for growth in UPI transaction volumes and 20% for incremental growth. NPCI is targeting 60 lakh to 1 crore new QR codes and 5 lakh to 10 lakh new soundboxes a year and 30% to 50% annual growth in volumes among existing small merchants.

As an example, a bank that onboards 1,000 merchants with 1,000 QR codes and 200 soundboxes could earn INR 4.5 lakh.

Incentives are calculated quarterly and settled within 30 days of a claim. Banks must report merchant locations, unique merchant identifiers and details of deployed devices and NPCI will review the scheme every six months.