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Unauthorised surcharging impeding online payment system: Study | The Economic Times

NEW DELHI: Unauthorised surcharging and high MDR charges are some of the reasons for impeding growth and sustenance of digital payments despite all efforts to promote it, according to a study.

“This is, inter alia, due to the distortionary pricing of payment products (i e MDR) and the continued fraudulent practice of surcharging by acquirer banks and big merchants.”

“Small/medium merchants on the one hand and customers on the other hand are losing out, hindering the government’s intent of broad basing digital payments,” as per the study done by IIT Mumbai.

It is estimated that the merchants were burdened with nearly Rs 10,000 crore towards credit card Merchant Discount Rate (MDR) in 2018 alone, it said, adding that this is exorbitant in contrast with the overall cost of Rs 3,500 crore towards debit card MDR, even though in value terms, credit and debit card transactions are nearly the same – Rs 5.7 lakh crore each in 2018.

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Unauthorised surcharging impeding online payment system: Study – The Economic Times.

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