The Reserve Bank of India will continue incentivizing merchants and consumers to move away from cash following last year’s demonetization of 80% of bills in circulation, including extending terms of a cash-back promotion for merchants.
The central bank’s payments arm, the National Payments Corp., or NPCI, is extending a promotion giving cash rewards to merchants when they accept Bharat Interface for Money, according to reports. BHIM is a QR-code-based mobile app the government launched in late 2016 in conjunction with the Indian Banks Association.
The promotion, which enables merchants to receive incentives of up to Rs 1,000 (US$15) when they accept payments via the BHIM app, began in April and was scheduled to run for six months, but India’s Prime Minister Narendra Modi this week said it will continue through March 31, 2018. Merchants must process at least 20 transactions of Rs 25 (US 40 cents) each month from unique BHIM users to receive the cash reward.
NPCI is also using a promotional strategy to expand BHIM use among consumers, giving users rewards for recruiting other users. To participate, a current BHIM user may submit a prospect’s mobile number as a referral code, and when the new user completes three payments totaling at least Rs 50, the referrer receives a reward of Rs 10. The new user also receives a one-time welcome reward of Rs 25.
National Payments Corp. this month said Bharat Interface for Money has 4 million active users and the app has been downloaded 16 million times. BHIM enables users with a bank account to make mobile payments in stores or online and to send funds to other app users.