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Paytm will be key beneficiary of India’s UPI incentive scheme
January 13, 2023
The Union Cabinet on Wednesday approved the incentive scheme of ₹26 billion for the promotion of RuPay Debit Cards and low-value BHIM-UPI transactions (P2M) for FY23, compared with ₹15 billion in FY22.
“Apart from banks, Paytm should be a key beneficiary of the above. On our estimates, Paytm would have received 5-7 per cent of the FY22 incentive, and assuming a similar share for FY23, this would represent 3-5 per cent of our contribution profit estimate (1 per cent higher than what we previously assumed for FY23),” the brokerage firm mentioned.
One97 Communications’s associate Paytm Payments Bank Ltd (PPBL) is the top beneficiary and leading remitter bank for UPI transactions.
PPBL is an issuer and PSP Bank in itself along with being an acquirer of UPI transactions.
Under the scheme, acquiring banks are provided with a financial incentives for promoting point-of-sale and e-commerce transactions using RuPay debit cards and BHIM-UPI transactions.
Vijay Shekhar Sharma, Founder, CEO & MD of Paytm, tweeted: “Huge commitment by GOI Cabinet to push Digital Payments thru UPI and RuPay. The #DigitalIndia mission of our government will bring long-term benefits to our economy.”
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