New charges on payments made using debit cards proposed by the RBI are higher than what they were pre-demonetisation for shops with sales of over Rs 5,500 a day (more than Rs 20 lakh a year).
With the pre-demonetisation cap on charges imposed by the RBI coming to an end on March 31, the central bank has proposed a new structure with effect from April 1.
Under the new proposal, shops with turnover below Rs 5,500 day will pay lesser fees (0.4%, or 40 paise on every Rs 100).But this is a segment that does not pay taxes and, therefore, there is no fiscal incentive to move to cards. Card companies, however, support the proposed charges as they say that there should be sufficient incentive for banks to go out and add merchants to card-accepting network. “We have seen how there had been a stagnation in terms of banks adding cardaccepting merchants after the RBI imposed restriction on MDR,“ said Porush Singh, division president, MasterCard.
According to T R Ramachandran, group country manager (India and South Asia), Visa, a bulk of the costs are on account of card payment infrastructure expenses.
