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MDR on small digital transactions
December 17 , 2017
2405 days
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- The Union Cabinet has decided that Government will borne Merchant Discount Rate (MDR) charges on transactions up to Rs. 2,000 made through debit cards, BHIM UPI or Aadhaar-enabled payment systems (AePS) to promote digital transactions.
- It will be borne by the government for two years with effect from 1 January, 2018 by reimbursing the same to the banks.
- MDR is the cost paid by a merchant to a bank for accepting payment from their customers via credit or debit cards every time a card is used for payments in their stores.
- In India, the RBI specifies maximum MDR charges that can be levied on every card transaction.
- A Committee will look into industry cost structure of such transactions which will form basis to determine levels of reimbursement.
- It will comprise of Secretary Department of Financial Services, Secretary Ministry of Electronics & IT (MeITY) and CEO, National Payment Corporation of India (NPCI).
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