State Bank of India (SBI) plans to remove transaction charges on point-of-sale (PoS) terminals for merchants who have an annual turnover less than Rs20 lakh, in a bid to boost cashless payments, according to a report quoting top bank official.
“We are looking at removing MDR (merchant discount rate) for merchants who have a turnover of Rs20 lakh and below on our own,” said Arundhati Bhattacharya, chairman of India’s largest lender.
The decision to do away with transaction charges for small merchants comes days after the government’s waiver expired on 31 December. Last month, the government had said that merchants would not be charged this fee on PoS transactions at their stores.
Currently, banks such as SBI charge an MDR of 0.25% on transactions less than Rs1000. They charge 0.5% for transactions between Rs1000 and Rs2000 and 1% for those of higher value.