[New Delhi]Relief To 61.5 Cr Debit Card Holders:No Transaction Charges[MDR]
Central Govt Today Announced No Transaction Charges on Debit Card Payments
Last yaer There were 61.5 crore debit card users and 2.3 crore credit card holders.
Central government today said no transaction charges will be levied on debit cards till December 31.
All public sector banks and some private sector ones have agreed to waive the transaction cost for all payments made through debit cards, Economic Affairs Secretary Shaktikanta Das told reporters
The move comes after the government reviewed the situation post demonetisation of 500 and 1,000 rupee notes and decided to encourage digital payments.
As of now, Rupay debit cards have already waived the switching charges. Other debit cards which operate international card network companies like Mastercard and Visa, currently charge transaction charges.
So far, customers bear the transaction cost commonly known as merchant discount rate (MDR) on payments made to the government.
“The MDR charges on use of debit cards, the charges being levied by the banks and the switching charges will stand completely waived. So, there will be no charge on use of debit cards.
Secretry said the intention behind this decision is to ensure greater penetration of digital transactions into our economy and to ensure that more and more people migrate towards digital transactions.
The Reserve Bank in 2012 had capped the MDR for debit card transaction at 0.75 per cent for transaction values up to Rs 2,000 and at 1 per cent for transaction values above Rs 2,000. However, there is no RBI cap on MDR on credit card payments.
In order to move towards ‘less-cash’ society by developing a card acceptance infrastructure, the RBI had in March came out with a concept paper to encourage card transactions and sought public opinion.
As of October 2015, there were 61.5 crore debit card users and 2.3 crore credit card holders in the country.
The Task Force on promotion of payments through cards and digital means has flagged issues with respective government departments