The Reserve Bank of India (RBI) on Wednesday revised merchant discount rate (MDR) charges, or the commission paid by a merchant to a bank for facilitating digital transactions, to encourage small businesses to start accepting card payments.
1. The fee for merchants with turnover up to Rs 20 lakh in the last financial year, is capped at 0.4% for transactions via PoS terminals or online while if the transaction is via QR code-based card acceptance infrastructure, the fee is capped at 0.3%. In both cases, Rs 200 has been set as the absolute cap.
2. For merchants with the annual turnover of more than Rs 20 lakh, a cap of 0.9% is prescribed for physical PoS and online card transaction while 0.8% cap is mandated for the QR code based transaction. The absolute cap, in this case, is Rs 1000.
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