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Why in the News?
Recently, the Reserve Bank of India (RBI) asked stakeholders if the merchant discount rate (MDR), should be brought back for Unified Payments Interface (UPI) transactions.
Key Points:
About Merchant Discount Rate
- MDR is a charge paid by merchants to banks and payment service providers for every transaction by giving them the infrastructure to accept digital payments during a transaction.
- It includes bank charges, and processing charges
- The cost is shared by the acquirer bank, the bank whose customer made the payment, and the card network provider such as Visa, MasterCard, and RuPay.
- It is applicable to peer-to-merchant payments or commercial transactions.
