New Delhi, Dec 8 (KNN) In an attempt to facilitate use of digital payments in the economy, especially among the small traders, the Reserve bank is considering to put a cap on the Merchant Discount Rate (MDR), a rate charged by a bank in return of the debit and credit card service transactions.

RBI in a press statement informed about the possible move.

The statement said that the apex bank is considering rationalising the MDR applicable on debit card transactions in order to fillip to acceptance of digital mode of payments for goods and services among small traders.

The new framework is to consider the category of the merchant and the rate is to be levied accordingly, RBI hinted.

Also the bank said that the MDR per transaction is also to be prescribed soon under the new upcoming framework.

The new developments are being considered in order to increase the use of digital mode of payments on one hand and to make a level playing field for businesses on the other hand, the bank notified.

As per the latest data issued by RBI, the overall volume of card payments at the PoS terminals have registered a growth of over 100 per cent in comparison to the base year 2012. (KNN/DA)