New Delhi: Centre has said it will bear the transaction cost for all payments made to it through debit or credit cards and net banking to promote cashless economy in the country.
Currently, customers bear the transaction cost commonly known as merchant discount rate (MDR) on payments made to the government. “The government departments shall take appropriate steps to bear MDR cost like other merchants.
The public shall not bear any MDR cost for making payment to government through debit cards or credit cards or digital means,” said the office memorandum issued by the Finance Ministry.
It said the methodology for reimbursement of such payment to intermediaries on transactions involving debt/credit cards or digital means is being worked out and the detailed guidelines and operational modalities would be issued in due course.
The Finance Ministry has issued the circular in pursuance of the decision of the government to promote credit/digital transactions in government payments and collections.
Last year in his budget speech Arun Jaitley had said the government would announce incentives to encourage card usage by consumers to curb black money flow into the system.
“One way to curb the flow of black money is to discourage transactions in cash. Now that a majority of Indians has or can have, a RuPay debit card, I, therefore, propose to introduce soon several measures that will incentivise credit or debit card transactions, and disincentivise cash transactions,” Mr Jaitley had said.
After this the government had set up a task force under DIPAM secretary Neeraj Gupta. The Task Force on promotion of payments through cards and digital means has flagged issues with respective government departments.
