To encourage the setting up of Point of Sale (PoS) terminals at merchant establishments, the National Payments Corporation of India has revised the interchange and switching fee for PoS transactions of the RuPay card scheme.
The move follows the RBI asking all banks to cap debit card Merchant Discount Rate (MDR) at 0.75 per cent for transactions up to Rs 2,000 and 1 per cent for transactions above Rs 2,000. MDR is the fee that a merchant establishment pays to the terminal deploying (acquiring) bank.
According to an NPCI statement, in line with the regulatory change, there was a need for all card schemes including RuPay to revise the interchange fee.
For the RuPay card scheme (the domestic card scheme floated by NPCI), which covers only debit card at present, the interchange rate has been revised to 0.45 per cent for transactions up to Rs 2,000 and 0.65 per cent for transactions above Rs 2,000.
“With an interchange level of 0.45/0.65 per cent, the terminal deploying banks will have a cushion of 0.30-0.35 per cent which will provide incentives to deploy terminals in the country,” said A.P. Hota, MD and CEO, NPCI.
NPCI said it will henceforth charge 60 paise per transaction to the customer’s bank (issuing bank) and 30 paise per transaction to the acquiring bank.