RBI to rationalise MDR to boost debit card transactions

06 December, Mumbai

 

In a bid to encourage electronic payments, the Reserve Bank of India (RBI) has decided to rationalise the Merchant Discount Rate (MDR) applicable on transactions conducted via debit cards.

According to the RBI, it has been decided to rationalise the framework for MDR applicable on debit card transactions based on the category of merchants.

“In recent times, debit card transactions at Point of Sales’ have shown significant growth. With a view to giving further fillip to acceptance of debit card payments for purchase of goods and services across a wider network of merchants, it has been decided to rationalise the framework for MDR applicable on debit card transactions based on the category of merchants,” the RBI said in a statement post its fifth monetary policy review on Wednesday.

“A differentiated MDR for asset-light acceptance infrastructure and a cap on absolute amount of MDR per transaction will also be prescribed.”

The country’s central bank added that the revised MDR aims at achieving the twin objectives of increased usage of debit cards and ensuring sustainability of the business for the entities involved.

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