Shares of company/companies paying digital payment service will be closed
New Delhi. The declaration made in the budget about merchant discount rate (MDR) has created a possibility of closed shops of companies that provide digital payment service. Last July 5, Finance Minister Nirmala Sitharaman had announced to eliminate MDR for both the client and the merchant for business turnover of more than 500 million to increase the volume of digital payments in the budget speech.
According to financial experts, the companies who have invested in infrastructure for digital payments, and who are earning through MDR, are going to be subjected to heavy shocks due to the elimination of MDR. Because on behalf of the government, it has not been clarified who will pay in the event of the closure of the MDR to the companies that provide digital payment service.
It has been said in the budget that the Reserve Bank and other banks will divide the burden of MDR cost, but nothing has been said about the intermediate company engaged in this work.
MDR is shared between the three parties
According to experts, the MDR is shared between the three parties. The card issuing bank, which generates huge amounts of debit and credit card for digital payment, and takes the bank’s capital in this work, the swipe machine issuing bank at the second store, keeping the swipe machine after calculating the money they give the money to the shopkeeper in their account and companies like Third Visa, MasterCard or Rupee, who are diversified to digitally credit the bank The connection to # accounts. These companies are intermediate companies that can be harmed by this government decision.
It may soon be issued by the government in this matter.
According to financial experts, there is no disadvantage due to the closure of the MDR to the government bank and the RBI, as the increase in digital payments will also increase the direct tax of the government.
Increasing digital payments will reduce the circulation of notes and the cost of printing of RBI’s note will be less. But there is no other way to offset the revenue generated by intermediate companies. Sources say that the government can soon issue a notification in this matter.