Boasting Digital Transactions – MDR Charges to be borne by Government for Transactions up to Rs.2000/-

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  • The Merchant Discount Rate (MDR) is a charge which a merchant has to pay to the banks for availing card transaction services.
  • Government will bear the Merchant Discount Rate (MDR charges) on transactions up-to Rs.2000 made through all debit cards i.e. BHIM, UPI and Aadhaar enabled digital transaction.
  • Government has allocated Rs.200 Crores for reimbursement of MDR Charges for the next Fiscal year.
  • Merchant Discount Rate will be borne by the Government for two years from 1st January 2018.
  • Union Government has taken this decision to promote digital transactions.
  • At present, 0.75 per cent charges has been charged by the banks as MDR charges for transactions up to Rs. 2000 and 1 percent for other transactions.

This move has been taken to establish less cash economy. It will also help merchants to make business more feasible for them and enable the merchant to enhance digital transaction.

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