Using RuPay Becomes 30% Cheaper As Govt Slashes MDR; Tax Benefits On QR Code UPI Payment?
The National Payments Corporation of India has reduced the merchant discount rate on the transactions that will happen through RuPay debit cards.
Previously, the Government of India had totally discarded the MDR on digital payments, and debit card transactions as well. Even IRCTC had declared no MDR on payments made through debit cards.
Also, there is good news for digital payments, which are on a roll as India is rapidly advancing towards its dream of #DigitalIndia. The Government of India is planning to offer tax benefits on QR-code based UPI payment.
Find out more about these new developments right here!
NPCI Reduces MDR For RuPay Debit Cards
National Payments Corporation of India (NPCI), which is the Government entity that looks after digital payments, has announced a reduction in MDR (merchant discount rates) on RuPay debit card transactions in order to rationalize them.
NPCI’s managing director and CEO Dilip Asbe said, “With the reduction and capping of MDR merchants will now be encouraged to accept debit cards, which up till now they were averse due to higher MDR structure.”
As of now, the MDR is 0.90 per cent for transactions above Rs. 2000, with a maximum cap of Rs. 1000. This has now been revised to 0.60 per cent for transactions above Rs. 2000, with a maximum cap of Rs. 150.
Additionally, the MDR on card-based QR transactions (Bharat QR) has also been reduced to 0.50 per cent with a maximum cap of Rs. 150 per transaction. This will encourage more and more consumers to use BharatQR code and also push merchants to use the same for accepting payments.
These changes will be official by October 20, 2019.
Govt. To Offer Tax Benefits on QR-Code Based UPI Payment
The Government of India has been rigorously pushing for citizens of India to adopt digital and cashless transaction methods. Recently, the state-run Bank of India also introduced a new technique for cardless cash withdrawal at an ATM.
To further promote cashless transaction, the Government is planning to introduce tax benefits and incentives on the QR-code based transactions.
As per reports, a source has said, “The idea is to offer a percentage of the GST being paid on a purchase back to consumers. This would boost digital payments, tax compliance for merchants and further adoption of UPI QR codes.”
Reportedly, the NPCI has given its approval to a proposal that asked for GST benefits to be extended to merchants and consumers under the condition that they share their GSTIN and PAN details.
This is set to become official in the next year, i.e. 2020.
We’ll keep you informed as more updates come in!