RBI tries to boost Digital Payments

As the government gives a major push for more people to adopt digital means for payments, the Reserve Bank of India reduced merchant discount rates or price that is paid by merchants to banks for card payments below Rs.2000.
It also instructed banks as well as prepaid payments instrument companies to not levy any charge on customers for transactions upto Rs.1000 done through USSD, IMPS or UPI. USSD or unstructured supplementary service data is the *99# service which is hosted by the National Payments Corporation of India (NPCI) and is being promoted by the government for payments in rural areas as it does not need smartphones or internet connectivity. Further IMPS or Immediate Payment Service and UPI or Unified Payments Interface are other NPCI hosted services which is also being promoted by government for more peer to peer digital transactions.
Both the set of instructions from the regulator would be applicable from January 1 of next year till March 31, since anyway these charges have been waived off till December end.
“For transactions upto Rs.1000, MDR shall be capped at 0.25% of the transaction value and that above Rs.1000 and upto Rs.2000, MDR shall be capped at 0.5% of the transaction value,“ said the RBI in a statement released on Friday. It did not say anything about changes in MDR for transactions above Rs.2000.

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