A tightrope walk

The merchant discount rate needs to be carefully balanced

The rift between the Reserve Bank of India and a host of merchants and retailers over the new way of calculating the merchant discount rate (MDR) is widening, with both sides refusing to budge from their respective positions. The MDR is the charge that a merchant has to pay to the bank concerned every time a consumer uses his debit card on the point-of-sales (PoS) machine. Trouble arose last week when the RBI announced a rationalisation of the MDR that is set to come into effect from January 1, 2018, and which, in effect, raised the MDR. On Wednesday, however,