Union Cabinet had recently approved a proposal that government will bear the MDR charges on transactions up to Rs 2, 000 made through debit cards, BHIM UPI or Aadhaar-enabled payment systems to promote digital transactions. What is the meaning of MDR?

BANKING GENERAL KNOWLEDGE

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

A	Merchant Discount Rate
B	Marginal Discount Rate
C	Merchant Division Rate
D	Merchant Discount Ratio

Explanation:

Detailed explanation-1: -MDR Charges on Debit Card (for transactions more than Rs 2000)= 0.60% for transaction above Rs. 2, 000 with a maximum cap of Rs 150 per transaction. MDR Charges on card-based QR transactions (Bharat QR)= 0.50% with a maximum cap of Rs 150 per transaction.

Detailed explanation-2: -MDR is charged to the merchants for accepting digital payments. While UPI payments are currently exempted from MDR, credit cards attract the highest MDR between 1%-2% of the total transaction amount.

Detailed explanation-3: -MDR is the rate or amount that a merchant pays for using a lender’s credit card or debit card services for accepting their customers’ bills. Presently, only Rupay-based debit cards and UPI do not attract any MDR charge.

Detailed explanation-4: -The UPI platform does not charge MDR to merchants, although it is charged for processing payments on debit and credit card transactions. The MDR is capped at 0.9% for debit cards.

There is 1 question to complete.