In December, 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.
"Happy Digital 2018. December Quarter BHIM transaction rises 86 per cent to 145.6 million with value of Rs 13,174 crore, 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" Financial Services Secretary Rajiv Kumar said in a tweet.
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. Merchant discount rate is the fee charged to a merchant by a bank for providing debit and credit card payment services.
However, due to this removal of charges, more and more people are now expected to use debit cards and UPI forms for making digital payments, and cashless will become even more attractive.
Govt. of India’s big push for a cashless economy has started with a bang in 2018!
In a decision which can be treated as a New Year gift, Govt. has announced the rollout of zero-fee charge for all debit card transactions and UPI transactions. Starting January 2nd 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.