RBI slashes MDR charges, effective from January 1. The Reserve Bank of India has taken a pivotal decision to promote digital transactions. The RBI has made a lot of changes on the Merchant Discount Rate (MDR) of Debit & Card Cards. Because of the increase in digital transactions, MDR charges have changed, said sources. The revised rates will be effective from January 1, 2018. The merchants will be classified based on turnover and charged accordingly.
How much RBI slashes MDR charges?
These measures have been taken to help small businessmen and merchants. RBI has also introduced different rates for QR code-based digital transactions. Rates for these transactions are 10 basis points lower for both merchant categories.
The decision was taken into consideration by two targets, promoting debit card transactions including small businesses and small companies, stabilizing the existing small businesses people and companies. The limit on the MDR Charges based on the amount of the transaction.
According to the latest revised rates, the MDR rate of turnover of up to 20 lakhs was set at 0.4 percent. If the transaction is carried out by the QR code, this would be further reduced by 0.3 percent. If the Annual Turnover is above Rs.20 lakhs, charges for Swipe machine-based transactions are 0.9% and QR based transactions are 0.8 percent.
RBI MDR has three slabs under current rules
- For transactions below Rs.1000: 0.25%
- between Rs.1000 and Rs.2000: 0.5%
- If the transaction value is more than Rs.2000, Merchant has to pay a commission of 1 percent
After demonetization of Rs.500 & Rs.1000, The RBI has been cutting the MDR charges once again.