Government is putting all ardent efforts to ease out the post-demonetisation phase and the recent cut in the MDR (Merchant Discount Rate) charges is one core example. With effect from April 1st, to smoothen up the digital transactions for small and mid level merchants, RBI has lowered the transaction charges to 0.4 per cent for every transaction.
These charges of 0.4 percent are for small merchants with yearly turnover of Rs. 20 lakh and for special merchants like insurance, utilities, mutual funds, public hospitals and educational establishments.
MDR charges are charged on the debit card purchases which is levied on the merchants who are giving the card swipe facility to customers. If the transaction is conducted via PoS or QR Code, the charges will be even lowered to 0.3 per cent.
Currently, the MDR charges are 0.75 percent for up to Rs. 2,000 transactions and 1 percent for more than Rs. 2,000.
The MDR payment charges will be unaffected for the credit card purchases.
These lessened charges will be applicable till March 31st and after that RBI will introduce new charges.
These changes include one more provision where the merchants will have to display the sign saying, “No service charges payable by the customers”.
The post demonetisation phase has amplified the digital transactions in the country and with the motive of cashless economy, RBI had to take care of the mounting charges on card transactions.
RBI has made four categories for the merchants. One of them is small merchants with yearly turnover of less than Rs. 20 lakh. The other category is for government transactions. The third category is for special category merchants and fourth category is for more than Rs. 20 lakh turnover merchants.
In case the transaction is happening for government, a fee of Rs. 5 will be levied up to Rs. 1,000 and Rs. 10 for more than that.
One important decision over the MDR for the petrol pump transactions is yet to be decided.
