Digitisation push: No charges on debit card payments up to Rs 2,000, MDR to be borne by govt for 2 years

New Delhi: Customers will not have to pay any transaction charges for payments through debit card, BHIM app and other payment made for up to Rs 2,000 from Monday (1 January) onwards.

Last month Union Cabinet approved a proposal that government will bear the merchant discount rate (MDR) charges on transactions up to Rs 2,000 made through debit cards, BHIM, UPI or Aadhaar-enabled payment systems to promote digital transactions.

Representational image. Reuters

Representational image. Reuters

"Happy Digital 2018. December Quarter BHIM transaction rises 86 percent to 145.6 million with value of Rs 13,174 crore," Financial Services Secretary Rajiv Kumar said in a tweet.

"Further impetus to digital payments, government to reimburse charges for transaction up to Rs 2,000 on debit cards/BHIM. Zero charges on merchants. Go Digital, embrace transparency," he said.

The merchant discount rate (MDR) will be borne by the government for two years with effect from January 1, 2018 by reimbursing the same to banks.

The move will have an impact of Rs 2,512 crore on the exchequer.

The decision was taken at the Cabinet meeting chaired by Prime Minister Narendra Modi.


Updated Date: Jan 02, 2018 09:32 AM

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