wordpress blog stats
Connect with us

Hi, what are you looking for?

Zero MDR on merchants will lead to collapse of payments acquiring industry, says PCI

payments, digital payments

The Payments Council of India has raised concerns over the budget proposal to levy zero MDR (merchant discount rate) on merchants, saying it will eventually lead to the collapse of the payments acquiring industry. In her maiden budget speech last week, Finance Minister Nirmala Sitharaman had said that all businesses with an annual turnover of more than ₹50 crore will have to offer digital payment modes, and that such merchants will not be charged MDR, which is typically around 1.5-2%. She said that the RBI and banks would bear this cost "from the savings that will accrue to them on account of handling less cash”. Prior to the budget announcement, the government was subsidising MDR on low-value digital transactions, that is, ₹2,000 or under. In a statement (see below) on July 9, PCI said that the announcement would "deflate the hard work done by the acquiring industry, and MDR, if not charged to the customers and merchants, should be borne by the government. This will help the acquirers invest in the expansion of the acquiring infrastructure". Terming it a "knee-jerk" policy change, PCI said it was also likely to spook foreign investors, who are "already managing some existing policies with great difficulty". Loney Antony, co-Chairman, Payments Council of India, and Vice-Chairman, Hitachi Payments said, “Non-bank payment service providers (PSPs) like aggregators/processors are a significant part of the ecosystem. If there is no commercial model, they will be forced to shut down. Banks may have multiple ways to recover money from the merchants, but…

Please subscribe/login to read the full story.
Written By

Free Reads

News

Telecom companies are against a regulatory sandbox, as they think information revealed by businesses during the sandboxing process might be confidential should be out...

News

According to a statement, the executive body of the European Union had also sought internal documents on the risk assessments and mitigation measures for...

News

The newly launched partially open-sourced LLM Grok-1 can be commercially used but not trademarked.

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.

Views

News

NPCI CEO Dilip Asbe recently said that what is not written in regulations is a no-go for fintech entities. But following this advice could...

News

Notably, Indus Appstore will allow app developers to use third-party billing systems for in-app billing without having to pay any commission to Indus, a...

News

The existing commission-based model, which companies like Uber and Ola have used for a long time and still stick to, has received criticism from...

News

Factors like Indus not charging developers any commission for in-app payments and antitrust orders issued by India's competition regulator against Google could contribute to...

News

Is open-sourcing of AI, and the use cases that come with it, a good starting point to discuss the responsibility and liability of AI?...

You May Also Like

News

Google has released a Google Travel Trends Report which states that branded budget hotel search queries grew 179% year over year (YOY) in India, in...

Advert

135 job openings in over 60 companies are listed at our free Digital and Mobile Job Board: If you’re looking for a job, or...

News

By Aroon Deep and Aditya Chunduru You’re reading it here first: Twitter has complied with government requests to censor 52 tweets that mostly criticised...

News

Rajesh Kumar* doesn’t have many enemies in life. But, Uber, for which he drives a cab everyday, is starting to look like one, he...

MediaNama is the premier source of information and analysis on Technology Policy in India. More about MediaNama, and contact information, here.

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ

Subscribe to our daily newsletter
Name:*
Your email address:*
*
Please enter all required fields Click to hide
Correct invalid entries Click to hide

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ