The Government is trying to promote cashless transactions as far as practically possible.

Digital payments give fillip to financial inclusion. It also enables digital trail of financial transactions leading to better tax compliance and reduces cost maintaining cash. Increased digital transactions will also enable small and micro enterprises to access formal credit.

A commercial establishment/industry registered as Merchant is expected to pay to the Acquiring Bank an amount out of their collections based on Merchant Discount Rate (MDR) which shall not be more than 1 % in case of debit cards.

This information was given by the Commerce and Industry Minister Smt. NirmalaSitharaman in a written reply in Lok Sabha today.

Merchant Discount Rate cap for debit card transactions limits merchant charges and promotes wider adoption of cashless payments. Commercial establishments registered as merchants must remit to the acquiring bank a portion of collections under a Merchant Discount Rate applicable to card transactions; the Government specifies a maximum MDR for debit card transactions to limit merchant charges and promote electronic payments.