State Bank of India (SBI) and National Payments Corporation of India (NPCI) have demanded equal treatment of RuPay debit card with Visa and Mastercard regarding the processing charge, reported The Economic Times.
From this year, the government decided to remove the fees merchants have to pay to banks, otherwise termed as merchant discount rate (MDR), for transactions made through RuPay debit card and UPI.
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RuPay card’s main issuers, SBI and other state-run lenders, are wary of the decision and feel that the elimination of the processing charge would hit their revenues.
NPCI said that the decision would compel issuers to favour international counterparts and hence opposed zero MDR for RuPay debit card.
In case of UPI transactions, NPCI asked the government to compensate banks for their lost revenue.
In a letter to the cabinet secretary, NPCI said that the move would put the homegrown instruments in “serious disadvantage compared to International Card Schemes (ICS) as banks (especially, private sector that constitute 50% of the market share) will prefer issuance of ICS over RuPay.”
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By GlobalDataTo address this issue, SBI requested the government to eliminate MDR charges for all card firms including Visa and Mastercard.
The bank said: “The PSBs which are the largest issuers of RuPay cards will be put in a disadvantageous position resulting in sizeable loss to them.
“Any changes in MDR waiver should be extended to all networks, viz – RuPay, Visa & MasterCard to ensure a level playing field.”
