Govt's Zero MDR move has hit payments industry badly, says RBI committee

Panel believes move will discourage innovation, has already led to contraction in national gross value of services

The government’s decision to reduce merchant discount rate (MDR) to zero for certain payments has hurt the industry quite negatively and may discourage innovation, a committee on QR (Quick Response) code based payments has said in its report.

The committee’s main recommendation was that there should be uniformity in QR code types and they should be interoperable wherever possible. But the committee was quite vocal on the abolishment of the MDR charges, something that participants in the Global Fintech Fest also highlighted at a virtual event. The event had the participation of Dilip Asbe, MD and CEO of National Payments