Govt to refund MDR losses to banks on digital payments for FY23

Payment companies like Visa and Mastercard have been seeking a level playing field with RuPay, claiming the government is favouring the latter

The Union Cabinet chaired by Prime Minister Narendra Modi on Wednesday approved an incentive scheme worth Rs 1,300 crore for 2022-23 to promote RuPay debit cards and low-value Unified Payments Interface (UPI) transactions up to Rs 2,000 by reimbursing the merchant discount rate (MDR) to banks, which was brought down to zero in December 2019.  

The scheme is expected to facilitate acquiring banks in building a robust digital payments ecosystem and promoting RuPay debit cards and BHIM-UPI digital transactions across all sectors and segments of the population, further deepening digital payments in the country, said the Cabinet Secretariat in a