The Ministry of Electronics and Information Technology (MeitY) and Ministry of Housing and Urban Affairs with fintech firms such as PayTM, BharatPe and PhonePe etc. are hoping to attract street vendors through a digital onboarding drive. This initiative falls under the PM SVANidhi scheme.
The 45-day special drive, which will cover 223 cities, aims to digitally onboard street vendors on the government’s ambitious Unified Payments Interface (UPI) platform. The government is targeting to onboard about 8,68,184 street vendors.
The MeitY, in a press release, said Digital Payment Aggregators will educate the street vendors about the benefits of digital payments such as convenience, increased operational efficiency, seamless transfer of funds, cost saving, transparency and security. “They will also hand hold the street vendors by performing penny drop transactions and any further support that is required to accept and pay digitally.”
On boarding street vendors onto the UPI platform will allow credit profiling of such vendors and bring a big part of India’s cash economy onto the more traceable digital space. The PM Street Vendor’s Atmanirbhar Nidhi (PM SVANidhi) was launched on June 1, 2020 as a Central Sector Scheme. It facilitates affordable working capital loan of up to Rs 10,000 with an interest subsidy at 7% on regular repayment. The street vendors are not required to pay any collateral for the loan.
Through this, the street vendors also have the chance to get a loan of Rs 20,000 and Rs 50,000 in the second and third tranches respectively on timely repayment of the loan. The government, in an effort to encourage digital transaction, is giving cash back up to Rs 1,200 on digital transactions at Rs 100 per month to the street vendors.
In recent years, there has been a significant rise in use of digital payments. Contactless digital payment modes including BHIM UPI, Rupay contactless etc. has significant role to facilitate social distancing for the prevention of COVID-19. The pandemic has catalyzed behavioral changes in citizens for the adoption of digital payments, as reflected in the tremendous growth in BHIM UPI transactions from 99.95 crore in April 2020 to 355.55 crore in August 2021. During the COVID-19 crisis digital payments, particularly BHIM UPI has played a significant role in keeping the economy running by supporting commerce and business.