PM Modi's New Year Gift..No charges on debit card payments for 2 yrs

New Delhi, Dec 15: In a bid to encourage electronic payments, the central government will now reimburse the Merchant Discount Rate (MDR) applicable on transactions worth Rs 2,000. According to the Minister of Electronics, IT and Law and Justice Ravi Shankar Prasad, the government will reimburse the MDR on conducted via debit cards, UPI and Adahar-based transactions. The decision was taken by the Union Cabinet in its meeting held on Friday.

"The government today has taken a very major decision to accelerate digital payments in the country -- MDR charges -- up on transactions worth Rs 2,000 shall now be reimbursed by the government to the merchants and the banks," Prasad said at a press conference after the Cabinet meeting.

This means that from January 1 next year, you will not have to pay fees on debit card, BHIM and UPI transactions up to Rs 2,000 for at least two years. 

“Merchant Discount Rate (MDR) applicable on all debit card/BHIM UPI/ AePS transactions up to and including a value of Rs 2000 will be borne by government for 2 years with effect from 1 January, 2018 by reimbursing same to the banks,” the Cabinet decision said.

"It is estimated that the MDR to be reimbursed to the banks in respect of transactions less than Rs 2,000 in value would be Rs.1,050 crore in FY 2018-19 and Rs.1,462 crore in FY 2019-20," the government added.

IANS/News24Bureau