GOVERNMENT TO PAY MDR CHARGES

To boost digital transactions, the government has decided to bear the merchant discount rate (MDR) charges on transactions up to ` 2,000 made via debit cards, BHIM UPI or Aadhaar-enabled payment systems. The government will pay the charges for two years starting from January 1, 2018. MDR is the fee paid by merchants for card services and installation of swiping machines. For small merchants with an annual turnover of up to ` 20 lakh, MDR has been fixed at 0.40 per cent with a cap of ` 200 per transaction. For those with more turnover, MDR charges will be 0.90 per cent with a cap of ` 1,000 per transaction. For transactions via QR code, MDR rates for small merchants will be 0.30 per cent while others will pay 0.80 per cent (in each case the cap will be as mentioned above).