No transaction charges on digital payments of up to ₹2000

December 16, 2017 Hot from the Oven Valli Sarvani No comments

Good news to all those who want to make payments with their cards. The Central government yesterday approved a proposal to bear bank transaction charges on the digital payments of up to ₹2,000.

Though several Indians are interested to use digital payment mode, the transactions hinder them in doing so.

Even many merchants discourage those who pay with the cards saying that they will be charged extra showing the cause of bank transaction charges.

While the government want to move India to digital side completely, some these prevent it in the initial stage itself.

Union Law Minister Ravi Shankar Prasad yesterday stated that the Merchant Discount Rate (MDR) which is applicable on all debit cards, BHIM UPI and AePS transactions of up to ₹2,000 will be borne by the government for the next two years.

This proposal will come into effect from January 1, 2018 and the charges will be reimbursed by the banks.

The minister added that the monetary value of digital transactions during the period of last six months i.e. from April 2017 to September 2017 was around 2.18 lakh crores.

Several measures have been taken by the Indian government to boost digital system in the country. Rolling out of GST is also one measure, added the minister.

Earlier the Reserve Bank of India had capped the MDR for debit card transactions of up to 2,000 at 0.75 per cent and 1 per cent if the transaction value is more than ₹2,000. Yet, credit card payments had not been capped by the RBI.

Now, the government proposes to bear the MDR on debit card transactions of up to ₹2,000 to improve the digital payments in the country and to reduce the usage of cash.

If the proposal of government comes into force, many people can certainly make use of this privilege.

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