RBI’s move to link merchant discount rate (MDR) charges to their revenue is aimed at encouraging small businesses to start accepting card payments. For small merchants, defined as those with revenue of less than Rs20 lakh, MDR would be 0.4% of transaction value or Rs200, whichever is lower. For other merchants, MDR is 0.9% of transaction value or Rs1,000, whichever is lower. That means an average transaction value of Rs1,375, at which the proposed MDR is higher than the current one. RBI has also introduced different rates for digital transactions processed through QR codes.

Source: Mint December 06, 2017 18:33 UTC