New Delhi, Dec 16 (KNN) In an attempt to boost digital payments in the country, The Union Cabinet chaired by Prime Minister Narendra Modi has approved the proposal of subsidizing Merchant Discount Rates (MDR) charges.

The notification will be implemented from January 2018.

Under the proposal, MDR applicable on all debit card/BHIM UPI/ Aadhaar enabled Payment System (AePS) transactions up to and including a value of Rs. 2000 will be borne by the Government for a period of two years with effect from 1st January, 2018 by reimbursing the same to the banks, the Cabinet informed in a press release.

The Cabinet has also constituted a committee with top officials including Secretary Department of Financial Services, Secretary Ministry of Electronics & I.T. and the CEO, National Payment Corporation of India (NPCI) to look into the structure of the proposal and implementation.

With the proposal in place, for all transactions less than Rs. 2000 in value, the consumer and the merchant will not suffer any additional burden in the form of MDR, encouraging the stakeholders to adopt digital payment methods. (KNN/DA)