RBI rationalises charges on debit card transactions

MDR is the rate charged to a merchant by a bank for providing debit and credit card services.

PTI
Mumbai, Publish Date: Dec 7 2017 12:11AM | Updated Date: Dec 7 2017 12:11AM
RBI rationalises charges on debit card transactionsRepresentational Pic

In order to promote digital payments, the Reserve Bank today came out with differentiated merchant discount rates (MDR) for debit card transactions, prescribing separate caps for small and large traders.

MDR is the rate charged to a merchant by a bank for providing debit and credit card services.

As per the latest notification, MDR charges for small merchants with an annual turnover of up to Rs 20 lakh has been fixed at 0.40 per cent with a cap of Rs 200 per transaction by debit cards through Point of Sale (PoS) machines or online transactions.

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.

These directions will come into effect from January 1, RBI said, adding it would be the duty of the banks to ensure the MDR levied on the merchant does not exceed the prescribed 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.  

 

Latest News

  1. Indian, Pakistani troops trade fire on LoC in Jammu and Kashmir
  2. Indian, Pakistani troops trade fire on LoC in Jammu and Kashmir
  1. Sharif, daughter cannot leave Pakistan: Imran Khan-led Govt decides
  2. Sharif, daughter cannot leave Pakistan: Imran Khan-led Govt decides
  1. Kota student develops device that can send distress calls without Internet
  2. Kota student develops device that can send distress calls without Internet
  1. Unlike now, government, opposition were close in Atal era: Azad
  2. Unlike now, government, opposition were close in Atal era: Azad
  1. Kerala fishermen refuse Rs 3,000 reward, leader Khais Mohammad says don't want money to save lives
  2. Kerala fishermen refuse Rs 3,000 reward, leader Khais Mohammad says don't want money to save lives
  1. SC to hear plea on AFSPA dilution on September 4
  2. SC to hear plea on AFSPA dilution on September 4
  1. Top officials review security in south Kashmir ahead of Eid-ul-Adha
  2. Top officials review security in south Kashmir ahead of Eid-ul-Adha
  1. Pakistani-origin becomes first female Muslim Australian Senator
  2. Pakistani-origin becomes first female Muslim Australian Senator
  1. Modi for 'constructive engagement', Pakistan says no dialogue on table
  2. Modi for 'constructive engagement', Pakistan says no dialogue on table
  1. Afghan Taliban kidnap 170 passengers
  2. Afghan Taliban kidnap 170 passengers
  1. Jailed Sharif appears in Pak court in remaining 2 graft cases against him
  2. Jailed Sharif appears in Pak court in remaining 2 graft cases against him
  1. Kanwar yatris clash with members of Muslims in Sikar district
  2. Kanwar yatris clash with members of Muslims in Sikar district
  1. Shots fired at US embassy in Turkey
  2. Shots fired at US embassy in Turkey
  1. Alwar lynching: SC seeks Rajasthan's response
  2. Alwar lynching: SC seeks Rajasthan's response
  1. Reservation in promotions: NC SC cell seeks implementation, pledges support to Article 35A
  2. Reservation in promotions: NC SC cell seeks implementation, pledges support to Article 35A
  1. India ready for constructive engagement with Pakistan: Modi to Imran Khan
  2. India ready for constructive engagement with Pakistan: Modi to Imran Khan
  1. Kashmir issue a reality, need uninterrupted dialogue with India: Pakistan Foreign Minister
  2. Kashmir issue a reality, need uninterrupted dialogue with India: Pakistan Foreign Minister
  1. Jammu and Kashmir: Seven dead as landslide hits two vehicles in Kishtwar
  2. Jammu and Kashmir: Seven dead as landslide hits two vehicles in Kishtwar
  1. 2 Haryana youth detained over attack on Umar Khalid
  2. 2 Haryana youth detained over attack on Umar Khalid
  1. 16 ministers from PM Imran Khan's cabinet sworn-in
  2. 16 ministers from PM Imran Khan's cabinet sworn-in
  1. Lanagte family seeks body of militant son killed in Rafiabad gunfight
  2. Lanagte family seeks body of militant son killed in Rafiabad gunfight
  1. Teachers stage sit-in protest in Srinagar to press for demands
  2. Teachers stage sit-in protest in Srinagar to press for demands
  1. To denounce deforestation, Peruvian actor marries tree
  2. To denounce deforestation, Peruvian actor marries tree
  1. US ready to facilitate, participate in dialogue between Kabul, Taliban
  2. US ready to facilitate, participate in dialogue between Kabul, Taliban
  1. 15 injured after bus, truck suffer collision in Poonch
  2. 15 injured after bus, truck suffer collision in Poonch
  1. 43 pilgrims leave for Amarnath Yatra in Kashmir Himalayas
  2. 43 pilgrims leave for Amarnath Yatra in Kashmir Himalayas
  1. BJP to suffer major losses in 2019: Kejriwal
  2. BJP to suffer major losses in 2019: Kejriwal
x
This site uses cookies to deliver our services and to show you relevant news and ads. By using our site, you acknowledge that you have read and understand our Cookie Policy, Privacy Policy, and our Terms of Service.That's Fine