MDR Waiver On Rupay Card Transactions To See Less Issuance Of Such Cards

Post a review meeting held with top executives of public sector banks (PSBs) Finance Minister Nirmala Sitharaman announced all the businesses with an annual turnover over Rs 50 crore will be mandated by the department of revenue to provide the facility of payment through RuPay debit card and UPI QR code, without levying any MDR fee. This change will be effective from January 2020.

MDR Waiver On Rupay Card Transactions To See Less Issuance Of Such Cards

MDR is a fee payable by merchants to banks for processing these payments transactions.
The decision can see fewer Rupay cards being issued as the scheme may put the global payments network at a disadvantage in comparison to other players including Visa and Mastercard. And as per two bank officials with know how on the development, while the public sector banks may be pushed to issue such cards, other private players may take on to issuing Visa and Mastercard debit cards.

Also, such a move can also come in the way of using Rupay cards for merchant payments.
"We will have to bear the cost of processing these card swipes, while there will be no money to be made per transaction, banks will have to rethink their strategy on giving out RuPay cards," said a senior banker with a private sector lender on condition of anonymity.
Also, beginning relief has been extended on UPI payments and these have been made free from this year.

"Banks have been issuing these cards because of the preferable pricing, but now with no money to be made per transaction, they could move back to issuing other card schemes where at least the MDR is applicable," said another banker in the know of the matter.
"Also, there is doubt whether NPCI will reduce its charges on settling the transactions."

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