The Union Finance Minister has announced that the Merchant Discount Rate (MDR) charges for businesses with over Rs 50 crore annual revenues will be waived off from January 1, 2020. Also, the digital transactions made using RuPay credit cards, or UPI QR codes will not face any additional charges for merchants or customers from January 1, 2020. All shops, business establishments and companies with an annual turnover of Rs 50 crore or more have been mandated to offer these modes of payment to customers. The Department of Revenue will also notify RuPay and UPI as the prescribed mode of payment for digital transactions without any Merchant Discount Rate (MDR).
The Merchant Discount Rate is the percentage of the digital transaction that a merchant pays to banks. This cost is often passed on to the customer. The decision aims to promote the home-grown digital payment pathways like RuPay and UPI, over those promoted by foreign companies, including VISA and MasterCard.
Important takeaways for all competitive exams:
- Union Finance Minister: Nirmala Sitharaman.
Source: The Hindu