For instance, the apex bank recently scrapped merchant discount rate (MDR) on Unified Payments Interface (UPI) transactions. MDR is the fees paid by a merchant to a bank for accepting payment from their customers via cards or UPI.
Finance Minister Nirmala Sitharaman had said in her Budget speech that no charge would be levied on UPI
and RuPay transactions. There have been reports that MDR may be scrapped on all debit card transactions.
It also said a self-regulatory organisation (SRO) would be set up for “orderly operations in the payment system”. And SRO will be set up by April for digital payment system for “fostering best practices on security, customer protection and pricing, among others. The SRO will serve as a two-way communication channel between the players and the regulator/supervisor,” the RBI
said in a statement.
To promote digital banking in rural areas, regional rural banks (RRBs) will now be allowed to act as merchant acquiring banks using Aadhaar Pay, the BHIM app and point of sale (PoS) terminals.
The RRBs will be allowed to deploy their own devices if they have permission for mobile banking from the RBI, and should fulfill other criteria specified by the regulator.
“The bank’s IT systems and CBS (core banking system) should have been subjected to an IS (information system) audit not earlier than six months from the date of application to confirm that the system is adequately secure,” it said.
In addition, the RRB must ensure necessary infrastructure for application development, safety and security of the transactions and handling of customer grievance, and a customer grievance redressal should be in place. The RRB should have had a net worth of Rs 100 crore or more as of March 31 of the preceding financial year, and other criteria specified by the RBI.
The RBI said the RRB should have a board approved policy on merchant acquisition for card transactions and no penalty should have been imposed on it in last two financial years.