Move comes to ease the customers; banks have waived MDR on all debit cards
All leading banks of our country, including ICICI Bank and HDFC Bank, have waived the merchant discount rate (MDR) on debit cards up till December 31 to ease payments by customers following government’s move to do away with the charge levied on merchants.
Leading Banks stated
Nation’s largest private sector ICICI Bank announced waiving the MDR on debit card proceedings at all merchants provided by its merchant acquiring arm ICICI Merchant Services IMSL.
It said the waiver would be under effect till December 31.
Nation’s second largest private bestower HDFC Bank also announced a similar move through its social networking handle Twitter, saying that the payments on RuPay, Mastercard and Visa debit cards will be at zero MDR.
Third largest private bestower Axis Bank, which has one of the largest POS networks, also announced a similar move till December 31.
It has enabled local kirana stores, autorickshaws, vegetable & milk vendors and other small ticket size vendors to accept payment digitally through QR code which will offer convenience to customers and facilitate small vendors to make cashless transactions, a statement stated.
The statement added that the Axis Bank has deployed micro ATM facility for cash withdrawal across corporates, police, airports and housing societies.
Announcing a waiver of MDR, Yes Bank stated that it has recalibrated 500 ATMs till now to accept the new Rs 500 and Rs 2,000 banknotes.
State-run UCO Bank’s managing director and chief executive R K Takkar said that it has also waived the MDR for all cards.
The largest bank in the Country, SBI, last week waived MDR on its RuPay cards.
Merchant Discount Rate
Currently the regulations allow up to a 2 percent MDR, which is considered by many as an impediment to electronification of transactions.
The financial service industry justifies the charge saying that there is a cost of setting up the infrastructure which also includes the point of sale machine and the switch at the backend.
Earlier in the day, Economic affairs secretary Shaktikanta Das announced that each bank will announce its moves individually.
“The MDR (merchant discount rate) is a charge levied on use of debit cards, the charges being levied by banks and the switching charges will stand completely waived. So, there will be no charge on use of debit cards,” he had said.