New Delhi, Mumbai: In order to encourage and promote digital transactions post demonetisation, the government announced today that no transaction charges will be levied on debit cards till December 31.
In a statement, Economic Affairs Secretary Shaktikanta Das said, “Public sector banks and some of the private sector banks, and some of the service providers who provide switching services, have agreed to waive the service charges on the use of debit cards up to December 31, 2016.”
Rupay has already waived off the switching charges. Other debit cards which operate international card network companies like Mastercard and Visa, currently charge transaction charges.
As of now, customers bear the transaction cost commonly known as merchant discount rate (MDR) on payments made to the government.
ICICI Bank, the country’s largest private sector bank by consolidated assets, today announced that its merchant acquiring arm, ICICI Merchant Services Ltd. (IMSL) has waived the Merchant Discount Rate (MDR) on debit card transactions at all merchants serviced by IMSL. It is effective from today, November 23, 2016 till December 31, 2016. Further, customers of ICICI Bank will continue to enjoy usage of their debit cards without any charge to them as has always been the case.
With this announcement, merchants serviced by IMSL will be able to accept payments on all Visa, Mastercard and RuPay debit cards without any cost to them, thus facilitating greater adoption of card based payments in the country in the wake of the demonetisation move. This announcement comes a day after ICICI Bank waived MDR on RuPay debit cards.
In a bid to encourage cashless transactions, ICICI Bank had announced on November 10, 2016, that it had proactively doubled the usage limits of debit cards of its customers w.e.f. November 10, 2016 till November 30, 2016. ICICI Bank was the first to announce this initiative. The Bank has now extended this benefit for customers till December 31, 2016, encouraging them to adopt cashless transactions.
Axis Bank, India’s third largest private sector Bank also waived Merchant Discount Rate (MDR) transaction fees on debit card usage. The bank has waived the service charges on the use of debit cards at Axis Bank terminals (merchant acquiring) effective tonight up to December 31, 2016. Additionally, the bank has partnered with merchants to allow customers to withdraw cash at POS terminals. The bank will also leverage its contact-less technology at POS terminals for faster transactions.
Axis Bank is consistently educating the stakeholders to adopt to digital banking channels. The bank has enabled the local kirana stores, autorickshaws, vegetable & milk vendors and other small ticket size vendors to accept payment digitally through QR code. This digital initiative is offering convenience to the customers and facilitating small vendors to make cashless transactions. The bank has additionally deployed micro ATM facility for cash withdrawal across corporates, Police, Airports & Housing societies.
“The MDR charges on use of debit cards, the charges being levied by the banks and the switching charges will stand completely waived. So, there will be no charge on use of debit cards.
As of October 2015, there were around 60 crore debit card users and more than 2 crore credit card holders in the country.
MDR Waived for Debit Card Transactions
