The Department of Financial Services has released a socio-economic impact analysis of the incentive scheme for promoting RuPay debit card usage and low-value BHIM-UPI person-to-merchant transactions. The study assesses how budgetary incentives have supported digital payments, merchant onboarding, payment infrastructure, and financial inclusion across India. It covers the scheme implemented from FY 2021–22 to FY 2024–25 and uses primary survey data from more than 10,000 respondents across 15 States.
Scheme Background
The incentive scheme was designed to make digital payments affordable and sustainable for users and merchants. It aimed to reduce cash dependence, encourage routine digital transactions, and strengthen the wider payments ecosystem. Support was extended to acquiring banks and other ecosystem participants to keep low-value digital payments viable at scale.
Study Design and Coverage
The analysis was conducted by an independent third-party research agency in consultation with the National Payments Corporation of India. It surveyed 10,378 respondents, including users, merchants, and service providers. The sample covered five geographical zones – North, South, East, West, and North-East. Fieldwork was carried out through face-to-face Computer Assisted Personal Interviews to improve data quality and reliability.
Key Findings
- UPI emerged as the most preferred payment mode among users, accounting for 57% of transactions, compared with 38% for cash.
- About 65% of UPI users reported making multiple digital transactions per day.
- Adoption was strongest among the 18–25 age group, where UPI usage stood at 66%.
- Nearly 90% of users said their confidence in digital payments increased after using UPI and RuPay cards.
- Among merchants, 94% of small merchants reported UPI adoption.
- About 57% of merchants reported higher sales after adopting digital payments.
- Digital transactions increased nearly 11 times during the scheme period.
- UPI’s share in total digital transactions rose to about 80%.
- UPI QR deployment expanded from 9.3 crore to about 65.8 crore.
- The number of banks operational on UPI increased from 216 in March 2021 to 661 in March 2025.
Policy Significance
The report marks that incentives helped reduce cost barriers, accelerate merchant acceptance, and expand trust in digital payment systems. It also notes wider benefits such as formalisation of economic activity, creation of digital footprints, improved transparency, and support for fintech innovation. The Government’s total budgetary support under the scheme stood at ₹8,276 crore, with annual disbursements spread across four financial years. The findings suggest that future policy should focus on stronger RuPay usage, rural and semi-urban adoption, UPI Lite promotion, better connectivity, digital literacy, and fraud risk mitigation.
Last Modified: April 28, 2026