An umbrella body of payment aggregators today alleged banks are yet to pay them the merchant discount rate (MDR) on small value digital transactions despite getting the money from the Government.
Payments Council of India (PCI), the body of non-banking merchant aggregators and acquires, said over 60 per cent of the Rs 4.50 lakh crore of debit cars, UPI, BHIM transactions between January and June will be under Rs 2,000, for which the Government has promised to pay the MDR of 0.4 per cent to incentivise digital payments in the economy.
"...none of the banks have reimbursed for transactions processed from 1st January 2018 till date," PCI chairman Vishwas Patel said in a statement.
The MDR is charged from the merchant in order to compensate the machine and network provider to set up the apparatus. Usually, the merchants used to insist on getting the same money from the shoppers. In December last year, the government said it will pay the MDR for transactions under Rs 2,000.
In the statement, PCI claimed the ministry of electronics and information technology has already reimbursed the MDR subsidies to banks, but most of the banks have not reimbursed the due share to aggregators yet.
Patel alleged that state-run lenders including SBI have announced that they will not reimburse for transactions of debit cards for transaction amounts below Rs 1,000.
The PCI statement said payments industry fears a major portion of the reimbursement will not be passed on by the banks.
More From This Section
For most payment companies, MDR is a major source of entire business revenue and non-receipt of such reimbursements poses a serious impact to their businesses, the PCI statement said.
Further, it said the MDR is to be split between issuing banks, card networks, acquiring banks, merchant acquirers and payment service providers.