New MDR rates to boost digital payments
The RBI has come out with differentiated merchant discount rates (MDRs) with effect from January 1. MDR is the rate charged to a merchant by a bank for providing debit and credit card services. The new rates, aimed at promoting digital payments, fixes MDR charges for small merchants with annual turnover up to Rs 20 lakh at 0.40 per cent with a cap of Rs 200 per transaction by debit cards. For accepting payments via QR (quick response) code-based transactions, the charge will be 0.30 per cent, subject to a limit 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 the transaction is through QR code, the charges will be 0.80 per cent with the similar cap.