Regulator rationalises card transaction fee

Volume and value of debit card transactions has only grown by 12 and 14% after demonetisation

In a bid to boost digital payments in the country, the Reserve Bank of India (RBI) has cut the merchant discount rates (MDRs) for debit card transactions at point-of-sale (POS) terminals and also put a cap on the absolute rate.

“The revised MDR aims at achieving the twin objectives of increased usage of debit cards and ensuring sustainability of the business for the entities involved,” the RBI said on Wednesday, in its Statement on Developmental and Regulatory Policies. 

MDR is the rate charged to a merchant by a bank for providing debit and credit card services. Effective January 2018, MDR