The fintech and digital payments sector welcomed the Rs 1,500 crore scheme announced by Finance Minister Nirmala Sitharaman in the Union Budget for 2021-22, and cheered the setting up of a fintech hub in GIFT City in Gujarat.

"There has been a manifold increase in digital payments in the recent past. To give a further boost to digital transactions, I earmark Rs 1,500 crore for a proposed scheme that will provide financial incentive to promote digital modes of payment," Sitharaman said in her budget speech.

While the sector cheered the move, some industry members such as Vishwas Patel, Chairman of Payments Council of India, said he hoped to see reimbursement for payments companies for losses on zero MDR.

"We welcome the Rs 1,500 crore announcement by the honourable finance minister to incentivise digital payments. Hopefully, it will be used to reimburse losses suffered by payment service providers for processing RuPay debit cards and UPI transactions for free in the year 2020 as well as top up the 500 crore fund set up by RBI as part PIDF," Patel said.

"There were many other asks of the Payments Council of India and we still have to study the fine print of the budget to see if relief has been given on GST transactions and merchant terminals etc that would help in growing the payments Infrastructre in our country," he added.

Pine Labs CEO Amrish Rau tweeted: "This is a progressive budget headed in the right direction. Like most, it's a journey, never the destination. #1500 cars of MDR support."

The zero MDR on UPI and RuPAy card payments, which came into effect starting January 2020, has hurt the payments sector.

First Published:Feb 1, 2021 2:21 PM IST