To promote cashless transactions, RBI reduces debit card transactions at merchant outlets
 Source : NewsBharati  Date : 07-Dec-2017

Mumbai, December 7: To boost Digitisation, the Reserve Bank of India (RBI) has taken a crucial step revising merchant discount rates (MDR) charges on Merchants. Now even small businesses will start accepting payments from your Debit card through Scan and Pay.

MDR is the rate charged to a merchant by a bank for providing debit and credit card services. As per the new rules, merchants with revenue of less than Rs 20 lakh, the MDR would be 0.4% for Rs 200 and 0.9% for Rs 1,000. These charges will come into effect from 1 January 2018.

 

For accepting payments via QR (quick response) code based transactions, the charge will be 0.30 per cent subject to a cap of Rs 200 per transaction.

In case the annual turnover of a merchant is over Rs 20 lakh, the MDR charges would be 0.90 per cent with a cap of Rs 1,000 per transaction. If transaction is through QR code, the charges will be 0.80 per cent with a similar cap.

RBI said rationalisation of the charges is being undertaken with a view to achieve the twin objectives of promoting debit card acceptance by a wider set of merchants, especially small traders, and ensuring sustainability of the business for the entities involved.

Following demonetisation, the RBI had in December last year capped the MDR charges at 0.25 per cent for transactions up to Rs 1,000.

For transactions above Rs 1,000 and up to Rs 2,000, it was capped at 0.5 per cent of the transaction value. Before that, the MDR was capped 0.75 per cent for transaction up to Rs 2,000 and not exceeding 1 per cent for payments above Rs 2,000.