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No fee on card, online payments made to govt

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In order to promote `less-cash' economy , the government has said it will bear the transaction cost for all payments made to it through debit or credit cards and net-banking.
 
At present, customers bear the transaction cost, commonly known as merchant discount rate (MDR), on payments made to the government.
 
“Government departments shall take appropriate steps to bear MDR cost like other merchants. The public shall not bear any MDR cost for making payment to government through debit cards or credit cards or digital means,“ said an office memorandum issued by the finance ministry. It said the methodology to reimburse such payment to intermediaries on transactions involving debtcredit cards or digital means is being worked out and the detailed guidelines and operational modalities would be issued in due course.
 
The ministry has issued the circular in line with the government's decision to promote creditdigital transactions in government payments and collections.
 
Earlier, the government had set up a task force under department of investment and public asset management (DIPAM) Secretary Neeraj Gupta.
 
The Task Force has flagged issues with respective government departments.
 
The Reserve Bank in 2012 had capped the MDR for debit card transaction at 0.75% for transaction values up to Rs 2,000 and at 1% for transaction values above Rs 2,000. However, there is no RBI cap on MDR on credit card payments.
 
The Times of India, New Delhi, 17 August 2016

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