India to move with "charge-less" transactions on Rupy And UP....

Delhi -

         Finance minister of India Nirmala Sitaraman announced on Saturday that there will no MDR( merchant discount rate ) on transaction done through Rupay and UPI. She firmly added that concerned department will notify the circular soon. She said ''there was no charge levived on  transaction up to 2000  ,and now we are extending to cover-up all transactions".She added " any company whose turnover is more than 50 crore and up will have to make available this cashless option.

       Now we need to understand what is MDR and what are components which take part in a a payment .How MDR has been  a big obstacle  to push the India towards  digital transactions and cashless economy...

MDR-It is the amount or charge of payment , a merchant's has to pay  to a bank to accept the payments.And simply we can say that it is the cost of payment which a payment originating source has to pay to  accepting source .Any transactions has three components :-

1.Interchaege-Amount taken by bank or a merchant through which payment is intitiated.

2 Payment gateway charge-It is the charge of payment medium  through payment is being done.Like Rupay,UpI etc

3.MDR- Charge given for accepting the payment.It is the end source where transaction get completed .

   In previous budget govt has promised to take-off it to Zero.Suppose if have to pay 1000 rs for a purchase and You are calling asking to pay 110 in respect of that ,How will you feel .why one will go to pay 10 RS extra .why one will opt this mode of payment .This was playing a vital role in declining the cashless transaction.

        On the other hand Payment Council of India criticised  the govt move .Council states  that this step will kill the payment industry. It would be a great loss to those are dreaming for Digital India. Most of revenue for payment banks comes through MDR.We can compromise with two components but abolishing MDR will disrupt the operation of payment bank's operation.

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