The government has introduced a no-fee debit card policy. In this policy, any charges levied on debit card and any other modes of the transactions will be removed.
Finance Minister Nirmala Seetharaman stated that a business which has an annual turnover of Rs. 50 crore will not be required to pay transaction charges on any debit card or other digital modes of transactions.
This signifies that there will be 0% MDR on debit card charges.
What is MDR?
MDR is the rate which is charged to a merchant on any payment processing service on debit and credit card transactions.
Merchants have to pay MDR to banks, card payment networks, and other payment service providers while doing any digital transactions.
No-fee debit card transactions are beneficial for small businesses who still use cash for everyday payments. With this new rule, the debit card can be used for any amount of payment.
Benefits of no-fee debit cards for small businesses:
- Debit cards will become as cheap as cash as the average cost of transaction in India is less than Rs. 150.
- This no-fee debit card transaction rule will also allow businesses to accept POS transactions i.e. usage of QR codes.
- Most of the customers have a bank account and a debit card, this will give more flexibility to your business to accept online payments. This move just means more flexibility for your business to accept online payments.
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