Photo: Aniruddha Chowdhury/MintMumbai: In order to promote digital payments, the Reserve Bank of India (RBI) on Wednesday 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. In case the annual turnover of a merchant is over Rs20 lakh, the MDR charges would be 0.90% with a cap of Rs1,000 per transaction. 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% for transactions up to Rs1,000.

Source: Mint December 06, 2017 10:21 UTC