Home / Industry / Banking /  NPCI revises merchant discount rates for BHIM UPI transactions

NEW DELHI : The National Payments Corporation of India (NPCI) has rationalised merchant discount rates for BHIM UPI transactions to promote digital payments.

Merchant discount rates (MDR) for large ticket transactions has been capped at maximum 100 and made zero at offline merchants for transaction up to 100, a statement said on Friday.

As per the latest notification, the MDR has been revised to 0.30% with a maximum cap of 100 per transaction.

Presently, this is capped at 0.25% for transactions up to 2,000 and at 0.65 per cent for transactions above 2,000.

Further, MDR for offline merchant where transactions are done through QR Scan and Pay will be zero for transaction up to 100. The new MDR rates will come into effect from October 1, 2019, the statement said.

MDR is paid by a merchant to a bank for accepting payments from customers through credit or debit cards.

The statement said NPCI has been taking various steps for proliferation of merchant payments using UPI.

NPCI - the umbrella body for digital transactions - has already introduced a new merchant category of P2PM category for small merchants wherein inward transactions up to 50,000 per month is allowed, it said.

This limit is now extended to 1,00,000 per month and with instructions for real-time credit to merchant's own account, it added.

The zero MDR for transaction up to 100 and increased limit for P2PM category (small merchants) will help faster migration from cash to digital using BHIM UPI, NPCI MD and CEO Dilip Asbe said.

"The lower MDR will encourage all categories and types of merchants to deploy the asset-lite acceptance infrastructure (BHIM UPI QR code) to grow digital footprint across the country. We envisage this reduction in MDR will encourage merchants to start accepting BHIM UPI and grow the volume on merchant transactions multi-fold," Asbe added.

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