State Bank of India has waived the Merchant Discount Rate (MDR) on the RuPay Debit Cards with immediate effect upto December-end 2016.
MDR is the commission charged by the acquirer (SBI), which provides necessary infrastructure to the merchant to accept payment, maintain relationship and facilitates acceptance payments through cards, to the Merchant (Trader/Service Provider).
MDR is capped by the Reserve Bank of India at 0.75 per cent for transaction value of up to Rs 2,000 and one per cent for transaction value above Rs 2,000.
The move possibly is aimed at supporting consumption demand, which has taken a beating following the government demonetising Rs 500 and Rs 1000 Bank notes with effect from November 9.
SBI, in a statement, said the usage and awareness of electronic and digital channels in Rural and Semi-urban areas is low even though as a first step it has already opened more than 10 crore FI (Financial Inclusion) accounts, with majority of the customers having been issued RuPay Debit Cards.
In order to facilitate their transition to the digital payments systems, SBI Chairman Arundhati Bhattacharya said her bank will waive the Merchant Discount Rate on the RuPay Debit Cards with immediate effect upto December 31, 2016.