No transaction charge on debit card payments till Dec. 31

To encourage widespread use of digital payments post demonetisation, the government on Wednesday said no transaction charge would be levied on debit cards till December 31.

All public sector banks and some private sector ones have agreed to waive the transaction cost for all payments made through debit cards, Economic Affairs Secretary Shaktikanta Das told reporters here.

The move comes after the government reviewed the situation post demonetisation of Rs. 500 and Rs. 1,000 notes and decided to encourage digital payments.

As of now, Rupay debit cards have already waived the switching charge. Other debit cards that operate international card network companies like Mastercard and Visa, currently charge transaction charge.

So far, customers bear the transaction cost commonly known as merchant discount rate (MDR) on payments made to the government.

The MDR charges on use of debit cards, the charges being levied by the banks and the switching charges will stand completely waived. So, there will be no charge on use of debit cards.

I take this opportunity to appreciate the gesture of public sector banks, and some of the private sector banks who have already agreed. And others are expected to agree and issue their own circulars, Mr. Das said.