In a bid to boost the usage of debit cards, the National Payments Corporation of India (NPCI) has reduced the merchant discount rate (MDR) for RuPay debit card transactions across Point-of-Sale (PoS), eCom, and BharatQR Code-based merchant transactions.
The MDR has been modified to 0.60 percent for transactions above Rs 2,000, with a maximum cap of a Rs150. As of now, it is capped at 0.90 percent for transactions above Rs 2,000, with a higher cap of Rs 1,000 per transaction.
Furthermore , for card-based QR transactions (Bharat QR), the MDR has also been brought down to 0.50 percent, with a maximum cap of Rs 150 per transaction.
The step is initiated at a time when the Budget has proposed no MDR for customers and merchants with lenders and the Reserve Bank of India is bearing the cost of it.
However, payments companies and banks have shown their disagreement on the proposal , and the RBI and Union Finance Ministry are yet to notify the scheme.
But NPCI’s latest move is likely to built pressure for other payment operators as well to lower rates.
Dilip Asbe, Managing Director and CEO, NPCI, sai, “Significant reduction in MDR will encourage the use of debit cards… this MDR rationalisation, along with the similar significant reduction in UPI MDR, will benefit all categories of merchants.”
