The National Payments Corporation of India (NPCI) on Saturday activated a cashback scheme for users — both consumers and merchants — of the Bharat Interface for Money (BHIM) app. The scheme for customers entails an initial cashback of Rs 51 on successful completion of their first transaction, as long as it is more than one rupee. Subsequently, customers can get cashbacks of up to Rs 750 per month. Each unique transaction worth Rs 100 and above will yield a cashback of Rs 25, subject to a total monthly cap of Rs 500 in cashbacks. In addition, there will be cashbacks based on the volume of monthly transactions carried out by a user. There will be a cashback of Rs 100 for users who complete between 25 and 50 transactions a month, a cashback of Rs 200 for 50 and 100 transactions, and cashback of Rs 250 for a higher monthly volume.
Merchants who accept payments through BHIM or other apps using the Unified Payments Interface (UPI) will be entitled to a maximum cashback of Rs 1,000 per month. They will receive a cashback worth 10% of the value of each transaction, subject to a cap of Rs 50 per transaction. Also, they must record more than 10 credit transactions per month, each of which should be more than Rs 25, in order to be eligible for the cashback. Per-transaction-based cashbacks will be the same for merchants who use other UPI apps. In their case, the number of credit transactions must be more than five per month, while the value of each transaction to be eligible for a cashback remains Rs 25.
On March 7, FE had reported that NPCI was likely to begin offering cashbacks, citing a request for proposal (RFP) put out by the institution for empanelment of an agency to offer rewards and loyalty programmes. So far, users of BHIM app have not had access to the range of rewards and freebies handed out by other payments players — a key reason for BHIM ceding market share to the likes of Google Tez and Paytm in recent months. Slipping from a 45% share in Unified Payments Interface (UPI) volumes till August, BHIM now accounts for roughly 6.7% of all transactions.
BHIM may, however, be constituting a much larger chunk of merchant UPI transactions. In March, payment services provider Razorpay had said 48% of UPI transactions on its platform come from BHIM. Trailing BHIM was Flipkart-owned PhonePe, which comprised 19% of the transactions on Razorpay, followed by Google Tez (14%), ICICI Bank’s app (7%) and Paytm (5%).