The Reserve Bank of India (RBI) has proposed that the merchant discount rate (MDR or charge) on debit card transactions be rationalised on the basis of turnover.
Transactions up to Rs.2,000 do not attractacharge but this is to end on March 31. The central bank issued draft guidelines on its website that propose the MDR be “on the basis of merchant turnover, rather than present slabrate based on transaction value”.
Besides, there should be differentiated MDR for the government and QRcode related transactions.
Also, “there isaneed to differentiate MDR between acquiring infrastructure involving physical terminals, including mobile pointofsale, or mPOS, and digital acceptance infrastructure models such as QR code”.
RBI proposes that whereamerchant is willing to pay upfront for the card acceptance infrastructure, the MDR has to be on the lower side.
The draft proposes different categories of merchants, based on the categories proposed in the coming goods and services tax (GST).
For example,amerchant with yearly turnover below Rs.20 lakh could be termed small.
Other categories such as government transactions, special categories of merchants and all other categories with turnover within the ambit of GST (turnover above ~20 lakh yearly) should be created.
For small merchants, MDR should be not more than 0.4 per cent with physical pointofsales infrastructure and 0.3 per cent for digital transactions.
The same limit for special categories of merchants such as utilities, hospitals or toll collection points.
For large merchants, the MDR could be as much as 0.95 per cent of the transaction amount.
For government transactions, 0.5 per cent of those above RS.2,000, withacap of Rs.250. For transactions below Rs.2,000,aflat charge up to Rs.10.
Business Standard New Delhi,17th February 2017
Transactions up to Rs.2,000 do not attractacharge but this is to end on March 31. The central bank issued draft guidelines on its website that propose the MDR be “on the basis of merchant turnover, rather than present slabrate based on transaction value”.
Besides, there should be differentiated MDR for the government and QRcode related transactions.
Also, “there isaneed to differentiate MDR between acquiring infrastructure involving physical terminals, including mobile pointofsale, or mPOS, and digital acceptance infrastructure models such as QR code”.
RBI proposes that whereamerchant is willing to pay upfront for the card acceptance infrastructure, the MDR has to be on the lower side.
The draft proposes different categories of merchants, based on the categories proposed in the coming goods and services tax (GST).
For example,amerchant with yearly turnover below Rs.20 lakh could be termed small.
Other categories such as government transactions, special categories of merchants and all other categories with turnover within the ambit of GST (turnover above ~20 lakh yearly) should be created.
For small merchants, MDR should be not more than 0.4 per cent with physical pointofsales infrastructure and 0.3 per cent for digital transactions.
The same limit for special categories of merchants such as utilities, hospitals or toll collection points.
For large merchants, the MDR could be as much as 0.95 per cent of the transaction amount.
For government transactions, 0.5 per cent of those above RS.2,000, withacap of Rs.250. For transactions below Rs.2,000,aflat charge up to Rs.10.
Business Standard New Delhi,17th February 2017
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