India Transact Services welcomes RBI reducing MDR charges on debit cards

To promote cashless transactions, RBI recently announced reduction in the Merchant Discount Rate (MDR) for debit card transactions.

Sunil Khosla, Executive Vice President, Sales & Marketing, India Transact Services Limited, a wholly owned subsidiary of AGS Transact Technologies Limited said, "India Transact Services (ITSL) welcomes RBI's progressive decision to rationalise debit card transaction charges based on category of merchants. The move will expand card based payments to a wider network of merchants and accelerate digital payments nationwide including tier 2 & 3 markets wherein the vast majority of small merchants operate. The reduction in Merchant Discount Rates (MDR) for card based transactions will especially benefit smaller merchants since the MDR paid for accepting payment from end-consumers via credit or debit cards in stores will reduce. As a result, merchant acquirers like us will be able to further encourage smaller retailers to accept card based payments, subsequently increasing merchant acceptance points across the country that will benefit the consumers.

However, we anticipate a few operational challenges at least for initial month as the new guidelines come in effect from 1st Jan 18. We hope that these new guidelines will also safeguard the interest of the acquirers as we are continuously investing in to build & enhance merchants acceptance points pan India to further strengthen the digital payment ecosystem.

RBI's decision when paired with the government's target of 25 billion digital payments by end of this fiscal, will definitely fast-track the sector's growth and boost digital payment ecosystem. Additionally, this move will also spur transparency in transactions."

Source : Equity Bulls

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